Aurelia Butler

TAIPEI (Reuters) – Taiwanese chip firm TSMC has raised $3.5 billon in bonds for its new plant in the U.S. state of Arizona, according to a term sheet.Taiwan Semiconductor Manufacturing Co Ltd, a major Apple Inc (NASDAQ:AAPL) supplier and the world’s largest contract chip-maker, started construction last year at the Arizona site where it plans to spend $12 billion to build a computer chip factory. More

WASHINGTON (Reuters) -Russia’s war in Ukraine is to blame for exacerbating “already dire” world food insecurity, with price and supply shocks adding to global inflationary pressures, U.S. Treasury Secretary Janet Yellen said on Tuesday.Even before the war, over 800 million people – or 10% of the global population – were suffering from chronic food insecurity, Yellen said, and estimates showed higher food prices alone could push at least 10 million more people into poverty.Yellen told a high-level panel countries should avoid export bans that could further boost prices, while stepping up support for vulnerable populations and smallholder farmers, a message underscored by German Finance Minister Christian Lindner.”I want to be clear: Russia’s actions are responsible for this,” Yellen said, adding that the United States was working urgently with partners and allies to “help mitigate the effects of Russia’s reckless war on the world’s most vulnerable.”Russia calls its Feb. 24 invasion a “special military operation” to “denazify” Ukraine.Lindner, speaking on behalf of Group of Seven advanced economies, said targeted and coordinated action was needed, but called on all countries to “keep agricultural markets open, not stockpile and not withhold stocks, and not impose unjustified export restrictions on agricultural products or nutrients.”He said the G7, currently led by Germany, had committed to work with international financial institutions and like-minded government organizations to “act in an agile manner.” The Treasury said participants agreed to work on an “action plan” to frame the problem, outline joint principles for a coordinated response and map out short- and long-term actions.Yellen underscored Washington’s commitment to authorizing essential humanitarian aid and ensuring the availability of food and agricultural commodities to benefit people around the world, even as it continued escalating its sanctions and other economic measures against Russia.She said it was also critical to strengthen longer-term resilience, and called on international financial institutions to help mitigate the global fertilizer shortage and smooth supply chain disruptions for food and critical supplies.She said they could increase investments in agricultural capacity and resilience to boost domestic food production.It was also critical to bring in additional sources of financing, including from the private sector, the Treasury said.Indonesian Finance Minister Sri Mulyani Indrawati told participants that food security would be a key issue in the first session of a meeting of finance officials from the G20, currently headed by Indonesia, warning that food and energy price spikes could “create huge political and social unrest.”Several participants called on the global community to look at existing tools such as the Global Agriculture and Food Security Program, which was created by the G20 in response to the 2008 food price crisis.World Bank President David Malpass told a separate event later that advanced economies should boost food aid to developing countries, and work to increase production of food, energy and fertilizer.He said cash payments or vouchers would be a good way to help farmers in poor countries buy fertilizer to ensure continued food production.IMF chief Kristalina Georgieva said the food security crisis was piling further pressure on the 60% of low-income countries at or near debt distress, and urged China and private-sector creditors to “urgently step up their participation” in the G20 common framework for debt treatment.”We know hunger is the world’s greatest solvable problem,” she said. “And a looming crisis is the time to act decisively.” More

Ukraine plans to open a humanitarian corridor for civilians to leave Mariupol, the besieged south-eastern city where Russia this week began a bombing campaign targeting the city’s Azovstal steelworks.The government secured agreement on a corridor to bring civilians out of the city from 2pm, Iryna Vereshchuk, Ukraine’s deputy prime minister, said on Wednesday.Buildings in Mariupol damaged during the Russian siege of the south-eastern Ukrainian city: a humanitarian corridor is due to let civilians flee the city on Wednesday © REUTERS/Alexander Ermochenko“Given the catastrophic humanitarian situation in Mariupol, it is in this direction that we will focus our efforts today,” Vereshchuk wrote on the Telegram social media platform. “We managed to agree in advance on a humanitarian corridor for women, children and the elderly.”She said that changes might occur to the path of the corridor “due to the very difficult security situation”.Several attempts to evacuate civilians from the city have collapsed because of mistrust between the warring sides since Russian troops encircled and bombarded the city and cut off power, water, heat and other basic services in early March. It was not immediately clear whether the corridor announced by Vereshchuk had Russian support. According to Ukrainian officials, Russia has begun using bunker-busting bombs on and near the grounds of the Azovstal steelworks, the last area of the city under Ukrainian military control. They said civilians, including children, were hiding from the bombing alongside the fighters in shelters beneath the sprawling complex, one of Europe’s largest steelworks.Ukraine’s military said in an update on combat operations on Wednesday that the Russians’ main efforts were “focused on capturing the city of Mariupol, continuing the assault in the area of the Azovstal plant”. Serhiy Volyna, commander of Ukraine’s 36th marine brigade in Mariupol, among the last Ukrainian troops in the city, released a video on Tuesday in which he pleaded for international action to “save Mariupol”. He included the hashtags #PopeActNow and #KidsOfCatacombs.Ukrainian military claims have not been independently verified. More

WASHINGTON (Reuters) -The International Monetary Fund’s new chief economist said on Tuesday he is concerned about increasing signals that inflation expectations are on the rise and may become entrenched at elevated levels, prompting more aggressive monetary policy tightening in advanced economies.Pierre-Olivier Gourinchas, who started transitioning to the IMF’s economic counselor role in January, told Reuters in an interview that the war in Ukraine, which has caused sharp energy and food price increases, may damage expectations for decades-high inflation to start to subside this year.A “very, very tight labor market” in the United States is increasing demands for wage increases to “catch up” with higher prices that could help fuel expectations among consumers and businesses that prices will keep rising, the French-born former University of California-Berkeley economist said.”So there is definitely a risk that we could have a wage-price spiral,” Gourinchas said. “And there’s a risk also that as we live through a period of elevated inflation, and we hear that it goes from five to six to seven to eight (percent) – and we don’t see it turning around – people will start reassessing what they think inflation will be in the future and businesses will also do the same thing.”That would be bad news for the Federal Reserve and other developed-world central banks, which have argued that inflation expectations among consumers and businesses have remained reasonably anchored at levels well below the current high readings of measured inflation.Some Fed officials have begun to fret publicly that they may have a limited window now to ensure that that remains the case and an aggressive run of rate hikes this year is needed to pull that off.Market signals from elevated Treasury yields have been ahead of consensus private forecasts for inflation, but both are pointing higher than the 2% inflation targets of many central banks, and forecasts have been “sort of moving up,” Gourinchas said.”And that’s really, you know, the red alarm signal on the dashboard here,” he said. “If you see that and you’re a central banker, you don’t have a choice. You have to step in more forcefully to make sure people really anticipate that inflation will remain stable, even if it’s elevated right now.”WAGE PRESSURESThe duration of elevated inflation readings is a downside risk for the United States and some other advanced economies.”If inflation remains elevated for more than just a couple more months, if it keeps drifting upwards, we see these wage pressures building, we see these inflation expectations drifting more permanently and in particular the consensus forecast, then I think we would see a much more aggressive tightening of monetary policy going forward.”Earlier on Tuesday, the IMF revised down its global economic growth outlook by nearly a percentage point from January due to shocks from Russia’s war in Ukraine, with significant downside risks from tighter sanctions. It called inflation “a clear and present danger” for many countries.Gourinchas said the Fund’s baseline forecast anticipated that inflation will peak in the current quarter and start to decline as pandemic-driven supply chain bottlenecks ease and the withdrawal of pandemic fiscal support helps cool demand.But while a faster tightening of U.S. monetary policy would slow U.S. growth further, it would be unlikely to cause a recession, based on the current baseline of still-robust 3.7% U.S. growth for 2022, Gourinchas said.Steeper rate hikes, energy sanctions on Russia that spike prices further or a big drop in asset prices that stokes volatility could “bring us closer” to recession, he said.”How close we could be, that’s not something we can assess precisely at this point. Our baseline is basically the U.S. economy is still going to be growing in 2022 and 2023,” Gourinchas said.On China, he said recent data showed that its slowdown caused by renewed COVID-19 lockdowns may be a steeper than in the IMF’s baseline, but the Chinese government had room for more monetary and fiscal stimulus actions to counteract these trends. More