21/03/2025

FRIDAY | MAR 21, 2025

18

BIZ & FINANCE

Fed in no rush to cut rates, Trump disagrees o Economic growth seen at 1.7% this year, inflation higher at 2.7%

SoftBank to acquire semiconductor firm Ampere for US$6.5b TOKYO: SoftBank Group said on Wednesday that it had reached a deal to acquire US semiconductor firm Ampere for US$6.5 billion (RM31 billion). The deal, which comes as demand for chips has exploded thanks to the AI boom, is still subject to regulatory approval, SoftBank said in a statement. Ampere Computing is a chip design firm “focused on high-performance, energy efficient, sustainable” AI technology, based on the ARM compute platform, the statement said. SoftBank Group is already the majority shareholder in Arm Holdings, whose technology is used in 99% of smart phones. The acquisition, which is expected to close in the second half of 2025, would reinforce SoftBank’s aggressive push into AI. In February, SoftBank Group and American tech giant OpenAI announced that they would form a joint venture to offer advanced artificial intelligence to businesses. The two were already working together on the Stargate drive announced in January by US President Donald Trump to invest up to US$500 billion in artificial intelligence infrastructure in the United States. – AFP “In particular there has been a contraction in the Chinese (luxury) market. Our market is now stabilising.” – Reuters Lamborghini sees tariff threat to US volumes MILAN: Potential American tariffs on European-made products could hit revenue at Lamborghini, its CEO said, as the sports car maker posted strong results for last year, despite a contraction in the luxury market. The Italian car maker, part of the Volkswagen group , said yesterday its revenues rose 16% last year to €3.09 billion (RM15.9 billion), while its operating profit was up 15.5% to €835 million, topping the €800 million threshold for the first time. Chief executive Stephan Winkelmann said the company now had an order book covering 18 months and its aim was to preserve it in coming years, to achieve “controlled growth”, as potential US tariffs could add further uncertainty to an already contracting luxury market. Lamborghini sold a record 10,687 vehicles last year, with around 3,000 units in the United States, its single largest market. Asked about the automaker’s ability to pass on potential US tariffs to car buyers to preserve margins in the country, Winkelmann said in a media call that there was a “sweet point”. “If you go beyond that you lose volumes, that is a fact,” the CEO said. “We need to assess what our competitors do and how American clients react, but there is a risk on volumes for sure.” Winkelmann said the wider luxury car market saw a 10% contraction last year versus 2023. “Our feeling is that a post-Covid bubble is over,” he said. “While such sudden growth in our market was unexpected, we knew it could not last forever.

tilted towards slower growth, higher joblessness and higher inflation. If the Fed’s median outlook for the next three years comes to pass, it would be the weakest three-year run of economic growth since at least former President Barack Obama’s first term in the White House and the slow recovery from the 2007-2009 recession. “We now have inflation coming from an exogenous source,” said Powell, using a term economists employ to describe an outside shock, in this case tariffs that could, if Trump follows through with all his plans, lift the average tax rate on imports to levels not seen since the Great Depression. Some of those levies have already been imposed, with the bulk due in early April in the form of steep 25% taxes on most goods from Mexico and Canada, and a sweeping set of tariffs meant to match whatever other countries impose on their imported goods from the US. Powell said the Federal Reserve will be watching intently in coming months to determine how much of all those actions passes through to consumer prices, whether those levies or other countries’ retaliatory responses seem to be causing more persistent price pressures and, perhaps most importantly, whether it all starts to feed into inflationary psychology among families and businesses. – Reuters

While Fed policymakers still expect the central bank to deliver two quarter-percentage point rate cuts by the end of this year, matching their projection in December, that is largely due to weakened economic growth offsetting higher inflation, and what Powell called the “inertia” of not knowing what else to do given the muddled outlook. There is “just really high uncertainty. What would you write down?” when making projections, Powell told a press conference after the Fed’s latest two-day policy meeting. “I mean it’s just ... really hard to know how this is going to work out.” “We understand that sentiment is quite negative at this time, and that probably has to do with turmoil at the beginning of an administration that’s making big changes,” Powell said. Overall economic data remains solid, the Fed chief said, pointing to the current unemployment rate of 4.1% and a sense that the job market remains roughly in balance. Powell’s remarks and the Fed’s latest set of policymaker projections was heavily influenced by what has transpired since Trump took office on Jan 20 with a vow to impose the import tariffs. Data released along with the latest policy and economic projections showed Fed officials in near unanimity that the outlook was less certain than usual, and that risks considered balanced as of the Fed’s Jan 28 and 29 meeting were now

WASHINGTON: Trump administration’s initial policies, including extensive import tariffs, appear to have tilted the US economy toward slower growth and at least temporarily higher inflation, Federal Reserve chairman Jerome Powell said on Wednesday, drawing the ire of the president. Trump posted late on Wednesday on his Truth Social platform: “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing.” Earlier, in explaining why rates were being kept unchanged, Powell described the uncertainty faced by Fed policymakers as “unusually elevated”. With overall sentiment sliding due to policy “turmoil”, prices are projected to rise faster than previously expected at least in part, and perhaps largely, because of Trump’s plans to impose duties on imports from US trading partners, Powell said after the Fed announced it had held its benchmark overnight rate steady in the 4.25%-4.50% range. Donald

Powell speaking at a press conference, following a two-day meeting of the Federal Open Market Committee on interest rate policy, in Washington. – REUTERSPIC

Nvidia CEO confident chip maker can weather trade war

SAN JOSE: Nvidia boss Jensen Huang expressed confidence on Wednesday that the artificial intelligence (AI) chip giant can handle US President Donald Trump’s trade war. “We have a really agile network of suppliers; they are not just in Taiwan or Mexico or Vietnam,” Huang said while meeting with journalists at Nvidia’s annual developers conference in San Jose, California. “If we add onshore manufacturing by the end of this year, we should be quite good.” Nvidia is not expecting tariffs to significantly affect its financial performance in the short term, according to Huang. He noted that the tariff situation is evolving,

coveted by video game enthusiasts. GPUs are also ideally suited for AI and the rise of that technology has catapulted the Silicon Valley-based chip maker into the spotlight. “We’re not making chips anymore; those were the good old days,” Huang quipped. “What we do now is build AI infrastructure.” High-end versions of Nvidia’s chips face US export restrictions to the major market of China, part of Washington’s efforts to slow its Asian adversary’s advancement in the strategic technology. Asked about this, Huang replied that his company is not alone in needing to respect each country’s laws. – AFP

and that what it does to Nvidia costs will depend on which countries are targeted by Trump. Trump has threatened to slap extra tariffs on imports of computer chips to the United States, which will heap pressure on Nvidia’s business, which depends on imported components mainly from Taiwan. The White House recently put out a release saying Trump is intent on making the US a “manufacturing superpower”, ramping up pressure to shift production back to this country. However, chip fabrication facilities can take years to build. Since its founding in 1993, Nvidia has specialised in graphics processing units (GPUs)