Overseas Headlines – June 22, 2021

United States:

Powell Renews Forecast for Inflation Subsiding Toward Fed’s Goal

“Federal Reserve Chair Jerome Powell said inflation had picked up but should move back toward the U.S. central bank’s 2% target once supply imbalances resolve. “Inflation has increased notably in recent months,” Powell said in written remarks prepared for his Tuesday testimony before the House Select Subcommittee on the Coronavirus Crisis, citing increases in oil prices and a “rebound” in spending as the U.S. economy reopens.”



Lagarde Sees Limited U.S. Inflation Spillovers to Euro Area

“European Central Bank President Christine Lagarde said accelerating U.S. inflation that prompted the Federal Reserve to shift its view of price risks will have only a limited impact in the euro area. Spillovers can occur “through the direct channel of imported goods originating in the U.S. and through several indirect trade or expectations mechanisms,” she told lawmakers in the European Parliament on Monday. Still, the overall effects on euro-area inflation “are expected to be moderate.”



Japan Needs Billions Now to Stem Chip Decline, Top Advisor Warns

“Japan must put at least a trillion yen ($9 billion) toward chip development this fiscal year and trillions more after that, if it is to have any hope of reviving its national industry, according to the government’s lead adviser on its new semiconductor strategy. Anything less won’t be enough, given the high cost of chip factories and how far Japan lags behind South Korea and Taiwan in advanced manufacturing, according to Tetsuro Higashi, chairman emeritus at gearmaker Tokyo Electron Ltd. and head of an expert panel advising the government.”




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