Asian equities yesterday rose, while London and Frankfurt hit fresh highs as traders took in stride a warning from US Federal Reserve Chairman Jerome Powell that the US central bank was in no hurry to cut interest rates.
The remarks, reflecting similar sentiments from another top monetary policymaker, came a day before the release of closely watched inflation data and reinforced expectations that US borrowing costs would likely remain elevated for some time.
Asia’s gains came despite worries about where US President Donald Trump’s next tariffs salvo would land after he imposed 25 percent duties on aluminum and steel imports, and said he was considering further measures.
Photo: AFP
Powell told US senators at a congressional hearing that with policy “now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust” rates.
“We know that reducing policy restraint too fast or too much could hinder progress on inflation,” he said. “At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment.”
The Fed cut rates three times last year as inflation continued to slow and the labor market softened, but expectations for more reductions over the next 12 months have been pared because progress is slow.
Observers said worries that Trump’s tariffs — and plans to slash taxes, regulations and immigration — could reignite prices had also played a role in traders scaling back their rate-cut bets.
Futures traders place a probability of just more than 55 percent that the Fed would make no more than a one-quarter-point cut this year, data from CME Group showed.
New York Federal Reserve President John Williams on Tuesday said that the economy and consumer spending remained strong going into this year, adding that inflation would continue to ease to the bank’s 2 percent target.
However, “it will take time before we can achieve that target on a sustained basis,” Williams told a conference in New York, according to prepared remarks, adding that he did not expect the target to be reached this year.
Readings on the US consumer and producer price indices due this week would be pored over for an idea about the Fed’s plans, while Powell was yesterday to deliver a second day of testimony in Washington.
Hong Kong yesterday led gains across most Asian markets thanks to another rally in its tech firms, while Shanghai, Tokyo, Sydney, Seoul, Singapore, Mumbai, Manila and Jakarta were also well up. Wellington was flat, but Taipei edged down.
London and Frankfurt extended gains at the open, having finished at a record high on Tuesday. Paris also rose.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS