US Secretary of the Treasury Janet Yellen said there are no “red lights flashing” for the financial system, and reiterated her view that the US economy has reached a soft landing even as job growth weakens.
“For the US, the kinds of metrics that we would monitor that would summarize risks — whether it’s asset valuations or a good degree of leverage — things look good, I don’t see red lights flashing,” Yellen said on Saturday at the Texas Tribune Festival.
“I’m attentive to downside risks” on employment, she said, adding that job growth is solid.
Photo: Bloomberg
The Treasury chief spoke a day after US equities capped the biggest weekly selloff since the regional banking crisis in March last year — roiled by a weaker-than-expected gain in payrolls that stoked concern that the US Federal Reserve would prove late to begin lowering interest rates.
The S&P 500 Index slid more than 4 percent last week.
“While there are risks, it really has been amazing to be able to get inflation down as meaningfully as we have” while maintaining strong growth, Yellen said. “This is what most people would call a soft landing.”
Yellen highlighted “wages going up at a decent clip,” surpassing the pace of inflation, along with the lack of any mass layoffs. Monthly job gains are at about the level needed to absorb new entrants to the labor market, she said.
Last month’s jobs release showed US hiring fell short of forecasts, with non-farm payrolls rising 142,000. The three-month average hit the lowest since mid-2020, but the unemployment rate edged down to 4.2 percent, Bureau of Labor Statistics data showed. That was the first decline in five months, reflecting a reversal in temporary layoffs.
Yellen also said she would welcome a visit to the US by Chinese Vice Premier He Lifeng (何立峰) and is open to another visit of her own to China, as she underscored the importance of the world’s two largest economies engaging with each other.
“I certainly may go back there — I would welcome a visit by my Chinese counterpart, and my guess is that we will have one way or another a visit,” she said.
Yellen met for hours with He during a visit to Beijing in April, continuing the re-engagement between the two nations that began in November last year with US President Joe Biden’s sit-down with Chinese President Xi Jinping (習近平).
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
China has threatened severe economic retaliation against Japan if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms, complicating US-led efforts to cut the world’s second-largest economy off from advanced technology. Senior Chinese officials have repeatedly outlined that position in recent meetings with their Japanese counterparts, people familiar with the matter said. Toyota Motor Corp privately told officials in Tokyo that one specific fear in Japan is that Beijing could react to new semiconductor controls by cutting the country’s access to critical minerals essential for automotive production, the people said, declining to be named discussing private affairs. Toyota is among