The US Federal Reserve cut its key interest rate on Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Republican Donald Trump’s presidential election victory this week.
The rate cut follows a larger half-point reduction in September, and reflects the Fed’s renewed focus on supporting the job market and fighting inflation, which now barely exceeds the central bank’s 2 percent target.
Asked at a news conference how Trump’s election might affect the Fed’s policymaking, Fed Chairman Jerome Powell said that “in the near term, the election will have no effects on our [interest rate] decisions.”
Photo: AFP
However, Trump’s election, beyond its economic consequences, has raised the specter of meddling by the White House in the Fed’s policy decisions. Trump has said that as president, he should have a voice in the central bank’s interest rate decisions.
The Fed has long guarded its role as an independent agency able to make difficult decisions about borrowing rates free from political interference.
Yet in his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he might do so again.
Asked whether he would resign if Trump asked him to, Powell, who would have a year left in his second four-year term as Fed chairman when Trump takes office, replied simply, “No.”
Powell said that in his view, Trump could not fire or demote him: It would “not be permitted under the law,” he said.
Thursday’s Fed rate cut reduced its benchmark rate to about 4.6 percent, down from a four-decade high of 5.3 percent. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1 percent peak in mid-2022 to a three-and-a-half-year low of 2.4 percent in September.
When its latest policy meeting ended on Thursday, the Fed in a statement said that the “unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2 percent target level, it “remains somewhat elevated.”
GEARING UP: An invasion would be difficult and would strain China’s forces, but it has conducted large-scale training supporting an invasion scenario, the report said China increased its military pressure on Taiwan last year and took other steps in preparation for a potential invasion, an annual report published by the US Department of Defense on Wednesday showed. “Throughout 2023, Beijing continued to erode longstanding norms in and around Taiwan by employing a range of pressure tactics against Taiwan,” the report said, which is titled “Military and Security Developments Involving the People’s Republic of China (PRC) 2024.” The Chinese People’s Liberation Army (PLA) “is preparing for a contingency to unify Taiwan with the PRC by force, if perceived as necessary by Beijing, while simultaneously deterring, delaying or denying
PEACEFUL RESOLUTION: A statement issued following a meeting between Australia and Britain reiterated support for Taiwan and opposition to change in the Taiwan Strait Canada should support the peaceful resolution of Taiwan’s destiny according to the will of Taiwanese, Canadian lawmakers said in a resolution marking the second anniversary of that nation’s Indo-Pacific strategy on Monday. The Canadian House of Commons committee on Canada-Chinese relations made the comment as part of 34 recommendations for the new edition of the strategy, adding that Ottawa should back Taiwan’s meaningful participation in international organizations. Canada’s Indo-Pacific Strategy, first published in October 2022, emphasized that the region’s security, trade, human rights, democracy and environmental protection would play a crucial role in shaping Canada’s future. The strategy called for Canada to deepen
QUICK LOOK: The amendments include stricter recall requirements and Constitutional Court procedures, as well as a big increase in local governments’ budgets Portions of controversial amendments to tighten requirements for recalling officials and Constitutional Court procedures were passed by opposition lawmakers yesterday following clashes between lawmakers in the morning, as Democratic Progressive Party (DPP) members tried to block Chinese Nationalist Party (KMT) legislators from entering the chamber. Parts of the Public Officials Election and Recall Act (公職人員選舉罷免法) and Constitutional Court Procedure Act (憲法訴訟法) passed the third reading yesterday. The legislature was still voting on various amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) as of press time last night, after the session was extended to midnight. Amendments to Article 4
‘ONE BRIDGE’: The US president-elect met with Akie Abe on Dec. 15 in Florida and the two discussed a potential Taiwan-China conflict’s implications for world peace US president-elect Donald Trump has described Taiwan as “a major issue for world peace” during a meeting with Akie Abe, the widow of late Japanese prime minister Shinzo Abe, Japanese newspaper the Yomiuri Shimbun quoted sources as saying in a report yesterday. Trump met with Akie Abe on Dec. 15 at the Mar-a-Lago estate in Florida, where the two discussed the Russo-Ukrainian war and the situation in the Taiwan Strait. During the meeting, Trump spoke on the implications for world peace of a potential Taiwan-China conflict, which “indicated his administration’s stance of placing importance on dealing with the situation in
RSS