International News 07 August 2025
-
Fed’s Daly Signals Rate Cuts Are Approaching Amid Weaker Labor Data
San Francisco Fed President Mary Daly indicated that the time for interest rate cuts in the U.S. is drawing closer, citing softening labor market data and limited inflationary impact from President Trump’s recent tariffs. While maintaining flexibility around the timing—whether September or December—Daly reaffirmed that two 25-basis-point cuts remain appropriate, though she is open to more if labor weakness persists. “I’m willing to wait one more cycle, but I can’t wait forever,” she said, adding that each policy meeting going forward is now “live” for a potential adjustment. Daly stressed that July’s modest job gain of 73,000, coupled with revised lower figures from previous months and a slight uptick in unemployment to 4.2%, reflect a labor market that’s clearly weaker than a year ago. She emphasized the importance of acting before inflationary pressures from tariffs potentially spread, warning that delayed responses could leave the Fed behind the curve. “Current policy is increasingly misaligned with economic conditions,” she concluded, signaling growing discomfort with the Fed’s current stance.
Trump to Announce New Tariffs on Semiconductors, Aiming to Boost Domestic Chip Production
President Donald Trump said he will soon unveil new tariffs targeting semiconductors and microchips, with implementation expected as early as next week. In a CNBC interview on Tuesday (August 5), Trump emphasized the need to bring chip production back to the United States, calling semiconductors a “separate category” in his broader tariff agenda. While details on tariff rates and affected countries remain unclear, the move comes amid soaring global demand for chips—especially for AI technologies. Taiwan, home to chip giant TSMC, is expected to be among the impacted nations, having already been hit with a 20% tariff under Trump’s recent trade actions. The President hinted that more tariff hikes are coming, including potential levies of up to 250% on pharmaceutical imports.
Trump to Name Fed Governor This Week, Shortlists Four Candidates for Fed Chair
President Donald Trump announced Tuesday (August 5) that he will appoint a replacement for outgoing Fed Governor Adriana Kugler by the end of the week. He also revealed that the shortlist for the next Federal Reserve Chair has narrowed to four candidates, including economic advisor Kevin Hassett, former Fed governor Kevin Warsh, and current Fed Governor Christopher Waller. Trump emphasized the distinction between the temporary role left by Kugler—whose term ends in January 2026—and the full-term Chair position, currently held by Jerome Powell until May. However, he acknowledged that his interim pick could influence monetary policy ahead of a potential formal nomination for a full 14-year term as Governor and possibly as Fed Chair. Trump has been openly critical of Powell for not lowering rates since his return to office in January, signaling a clear desire for leadership more aligned with his economic agenda.