US inflation remains “uncomfortably” above the Federal Reserve’s target despite the progress it has made in recent months, a senior bank official said on Saturday.
The US central bank has held interest rates at a two-decade high for the past year as it battles to return inflation to its long-term target of two percent following a COVID-19-era surge in prices.
The Fed’s favored inflation gauge now sits at an annual rate of just 2.5 percent — well below the peak reached in 2022 — while the US economy is still growing and the labor market has somewhat weakened.
Photo: Al Drago, Bloomberg
Against this backdrop, Fed chair Jerome Powell said late last month that the bank could move ahead with its first interest rate cut as soon as next month — if economic data continues to come in as expected.
However, some Fed officials have been more cautious about signaling rate cuts than others.
“The progress in lowering inflation during May and June is a welcome development,” Fed Governor Michelle Bowman told a conference in Colorado Springs. “But inflation is still uncomfortably above the committee’s two percent goal.”
Despite “upside risks,” Bowman said she still expects inflation to ease in the coming months.
However, she warned policymakers to remain patient “and avoid undermining continued progress on lowering inflation by overreacting to a single data point.”
“I will remain cautious in my approach to considering adjustments to the current stance of policy,” she added.
The remarks from Bowman, who is a permanent voting member on the Fed’s rate-setting committee, suggest that she remains concerned about cutting interest rates too soon — despite overwhelming support for a rate cut in the financial markets next month.
Futures traders are now wholly convinced that the Fed would cut interest rates at a meeting next month, and are instead split over how big its first cut would be, CME Group Inc data showed.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
STRUGGLING TO SURVIVE: The group is proposing a consortium of investors, with Tesla as the largest backer, and possibly a minority investment by Hon Hai Precision Nissan Motor Co shares jumped after the Financial Times reported that a high-level Japanese group has drawn up plans to seek investment from Elon Musk’s Tesla Inc to aid the struggling automaker. The group believes the electric vehicle (EV) maker is interested in acquiring Nissan’s plants in the US, the newspaper reported, citing people it did not identify. The proposal envisions a consortium of investors, with Tesla as the largest backer, but also includes the possibility of a minority investment by Hon Hai Precision Industry Co (鴻海精密) to prevent a full takeover by the Apple supplier, the report said. The group is
RSS