All central bank directors voiced support for a rate pause at September’s board meeting on concern that a rate hike would put pressure on economic growth, although retail prices remained relatively high, according to the minutes released yesterday.
A rate hold for the second time after four rate hikes to tame inflation would be in favor so that consumer spending and private investment would not be thwarted, one board member said.
A rate hike would be inappropriate, with most sectors struggling to grapple with a business slowdown and poor order visibility, the director said, adding that if the central bank raised policy rates, the financial burden on mortgages would grow heavier, which would be unfavorable to steady growth in domestic demand.
Photo: CNA
Households might cut spending, curtailing growth in domestic demand, another director said.
A rate hike of 12.5 basis points would have very little effect on future price trends, the director said.
Another director approved of holding rates steady for the time being without ruling out the possibility of needing to proactively address inflation next month depending on economic data.
The director said existing data is sending mixed signals. On one hand, retail prices and service charges were still high and so were housing rents, which have a significant weighting in the consumer price index (CPI).
On the other hand, core CPI after excluding volatile items started to moderate while staying on an expansion course, the director said.
The central bank made another cut to its GDP growth forecast and expected the output gap to remain negative this year. That divergent data warranted a rate hold, the director said.
Another director said a resilient job market suggested that policy rates are being handled properly and the rate hold should be extended.
Electricity rate hikes from last month onward would have a limited impact on inflation, the director added, citing a central bank study.
Nevertheless, uncertainties abound and the board could consider tightening policy rates when it sees fit, the director said.
One director said that the slowdown in exports and private investment was worrying, as they are the driving force of the nation’s GDP growth.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
RSS