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TOKYO (Reuters) -Bank of Japan policymakers were divided on how quickly the central bank should raise interest rates further, minutes of the bank’s July meeting showed, highlighting uncertainty on the timing of the next increase in borrowing costs.At the July meeting, the BOJ raised short-term interest rates to 0.25% and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus.At least two in the nine-member board saw scope to raise rates further, with one saying the BOJ should hike borrowing costs in a “timely and gradual” manner to avoid being forced to do so rapidly later, the minutes showed on Thursday.Another member said the BOJ must raise rates further once it was confirmed that firms were increasing capital expenditure, wages and prices, according to the minutes.Several others, however, warned against proceeding too quickly in phasing out stimulus.”Normalisation of monetary policy must not be an end in itself,” one member was quoted as saying, adding that the BOJ must monitor various risks and move carefully.”The BOJ should avoid a situation where market expectations for future rate hikes increase excessively,” as inflation expectations have yet to be anchored at its 2% target and prices remained vulnerable to downside risks, another member said. More
(Reuters) -Micron Technology shares surged roughly 14% in after-hours trading after the memory maker forecast higher than expected first-quarter revenue due to the thirst for its memory chips used in artificial intelligence computing.Micron (NASDAQ:MU) is one of the only three providers of high-bandwidth memory (HBM) chips along with South Korea’s SK Hynix and Samsung (KS:005930), which has allowed the U.S. firm to cash in on demand for semiconductors that help power generative AI technology.HBM is a space-saving, power-efficient type of dynamic random access memory chip, or DRAM, crucial for AI-focused graphics processing units, that aid in processing vast amounts of data.”Demand from data center customers continues to be strong and customer inventory levels are healthy,” Micron CEO Sanjay Mehrotra said on a conference call with analysts.The company said in June its HBM chips, used in the AI processors designed by Wall Street darling Nvidia (NASDAQ:NVDA), were sold out for the 2024 and 2025 calendar years with pricing already determined.Micron expects to report record revenue of about $8.7 billion, plus or minus $200 million, in the first quarter and forecast a jump in gross margin to about 39.5% for the same period.Analysts had expected revenue of $8.28 billion for the first quarter and adjusted gross margin of 37.7%, according to LSEG data.The AI boom has also helped Micron cushion the hit from a memory chip inventory glut in PC and smartphone markets.Personal computers infused with AI technologies are expected to have more memory chips, helping firms such as Micron.AI PCs may have over 30% more DRAM and Microsoft (NASDAQ:MSFT)’s push to have users shifting to Windows 11 from an older version, may expand the market, especially for commercial PCs in 2025, said Summit Insights senior research analyst Kinngai Chan.Micron’s results typically set the tone for the chip sector as it reports ahead of peers and serves a broad client base spanning the PC, data center and smartphone industries.”HBM, high capacity memory and data center flash storage, each of these three product categories will be multiple billions of dollars in revenue in 2025,” Micron’s Chief Business Officer Sumit Sadana said.For the first quarter, the company forecast an adjusted profit of $1.74 per share, plus or minus 8 cents, compared with analysts’ estimates of $1.65. More
Some of her ideas build on unfinished business in President Joe Biden’s economic agenda but expand their scope and size.Here’s what we know so far:INDUSTRIAL INCENTIVESHarris on Wednesday pledged new tax credits to spur more domestic manufacturing and to invest in sectors that will “define the next century,” including biomanufacturing, aerospace, artificial intelligence, quantum computing and blockchain, advanced nuclear power, and batteries.She also said she would offer tax incentives for expanding “good union jobs” in long-standing iron, steel, coal and other traditional industrial communities. Details on the size and scope of the incentives and investments were not announced.Harris announced new investments in U.S. basic technology research, through the National Science Foundation, the Department of Energy’s National Laboratories and other institutions.She also announced plans to cut red tape to speed the construction of new infrastructure and industrial projects and to use the Defense Production Act and other tools to boost U.S. capacity to process critical minerals and reduce reliance on supplies from China.TAX ON THE WEALTHY Harris has echoed Biden’s promise not to raise taxes on households that earn less than $400,000 a year.She has quietly endorsed most of the nearly $5 trillion in tax hikes over a decade in Biden’s fiscal 2025 budget proposal, which would boost the top income tax rate to 39.6% from 37%.These include a new 25% minimum tax on people with fortunes exceeding $100 million, including on unrealized capital gains. For those earning more than $1 million annually, Harris has proposed raising the long-term capital gains tax rate paid after selling assets like stocks to 28% from 20%, an increase far smaller than the 39.6% full top income tax rate proposed by Biden.TAX ON BUSINESSES Harris has proposed increasing the corporate tax rate to 28%, partially reversing former President and Republican rival Donald Trump’s 2017 tax law, which cut company tax rates to 21% from 35%. The step would raise $1 trillion for the federal government over a decade, budget experts estimate, but cut into company profits, Wall Street says. Big U.S. companies pay a far lower effective tax rate than their foreign competitors at an average of 16%, a Reuters analysis showed. Any broad corporate tax changes would need to be passed by Congress. CHILD TAX CREDIT Harris has kept Biden’s proposal to permanently restore a one-year, COVID-19-era increase in the Child Tax Credit to as much as $3,600 per child from $2,000 currently, which is scheduled to drop to $1,000 after 2025. She also has proposed a $6,000 bonus onetime credit for families with newborns.Trump’s vice presidential running mate, JD (NASDAQ:JD) Vance, has floated raising the annual Child Tax Credit to $5,000, but the idea has not been adopted as an official Trump policy proposal.AFFORDABLE HOUSINGHarris has detailed plans to spur new construction and reduce costs for renters and homebuyers, largely through tax incentives. They include tax credits for builders of homes for first-time buyers and affordable rental units, along with a $25,000 tax credit to help first-time buyers with down payments for the next four years. Harris is also proposing a $40 billion “innovation fund” to encourage local governments to build more affordable homes, doubling a Biden budget proposal that would make competitive grants to local governments that show they can get results. U.S. home prices have risen 50% in the last five years and rents have risen 35%, according to real estate firm Zillow (NASDAQ:ZG), largely due to a housing shortage. Harris has set a goal to increase U.S. housing construction by 3 million units over the next four years.SMALL BUSINESS TAX CREDITHarris also has deviated from Biden’s economic plan by proposing to increase the tax deduction to up to $50,000 for new small business start-up costs from $5,000 currently to support entrepreneurs. The 33 million U.S. small businesses were responsible for 70% of net new jobs created since 2019, according to Small Business Administration data.CHILD CARE “My plan is that no family, no working family, should pay more than 7% of their household income in child care,” Harris told the National Association of Black Journalists in September. U.S. parents are currently paying as much as 19.3% of median family income per child for care, Department of Labor figures show. The 7% figure echoes the Child Care and Development Block Grant, a program Harris has touted that currently supports about 1 million children in low-income families. Harris’ campaign has not detailed how the child care plan would work.HIGH GROCERY PRICES Harris has vowed to enact the “first-ever federal ban on price gouging on food and groceries” that aims to stop big corporations from unfairly exploiting consumers while generating excessive profits. Defining such excessive price hikes is not clear, but some proposals in the U.S. Senate show a potential path to enactment. More
LONDON (Reuters) – British consumers have grown more gloomy over the past month following the new Labour government’s removal of a welfare benefit for pensioners and warning of tax rises at next month’s budget, a new survey from a trade body showed on Thursday.The British Retail Consortium said households’ assessment of the general economic situation over the next three months sank to -21 in September from -8 in August. This reading – which represents the difference between the percentage of respondents with positive and negative views – is the lowest since the survey’s initial reading of -23 in March.”Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations,” BRC Chief Executive Helen Dickinson said.September is the first time that the BRC has published the results of its survey, which was based on a sample of 2,000 adults conducted by market research company Opinium between Sept. 10 and Sept. 13.The results chime with those last week from the much longer-running GfK consumer survey, which fell to a six-month low this month due partly to concerns about the upcoming budget.Prime Minister Keir Starmer and finance minister Rachel Reeves were elected in July, vowing to rebuild the economy after inheriting what they said were the worst economic circumstances since World War Two.Reeves has said she will remove an annual 200-pound ($265) fuel subsidy from 10 million pensioners and warned taxes were likely to rise by more than she had said was planning to before Labour’s July election victory.The BRC survey showed that households’ assessment of the outlook for their personal finances sank to -6 from -1, its lowest since the start of the survey, although spending intentions edged up marginally to -8 from -9.Last week, S&P Global reported a softening in business activity, as some companies put plans on hold until there was more clarity on changes to taxation and employment law.However, a separate survey released on Wednesday by the Recruitment and Employment Confederation showed employers’ sentiment over the third quarter of 2024 was slightly less negative than in the three months to June. More
Islamabad had been working on implementing conditions that Sharif had previously called “strict” from the IMF to complete the 37-month loan programme agreed to in July, which the country hopes will be its last.The IMF said the new program will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”An immediate disbursement of about $1 billion will take place. Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media this week that Pakistan had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.”Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.Rollovers or disbursements of loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped the country meet its external financing needs in the past.The government had also vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates. Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout. Inflation has since eased and credit ratings agency Moody’s (NYSE:MCO) has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to ‘Caa2’ from ‘Caa3’, citing improving macroeconomic conditions and moderately better government liquidity and external positions. More
