Cebu Pacific eases growth plans after Airbus jet grounding woes
Cebu Pacific Air says it will moderate next year’s rapid expansion plans as it grapples with more Airbus SE aircraft groundings than anticipated because of Pratt & Whitney’s global backlog of engine repairs.
The Philippines’ largest airline expects to grow between 5% to 15% in 2026 while navigating challenges of defective aircraft engines, Chief Executive Officer Mike Szucs told Bloomberg TV.
“It’s a wide window at the moment as we try and understand exactly the situation on the GTF engine,” Mr. Szucs said.
The engine crisis is triggering sharp growth pullbacks among carriers worldwide, from Europe’s Wizz Air Holdings Plc. to the ailing Florida-based Spirit Airlines Inc.
The ongoing fluctuations in availability of aircraft and jet engines is consuming Cebu Pacific’s management, with fleet planning occurring three times a week instead of once a month.
“None of us have encountered this situation where you have so much variability or so much uncertainty in your available fleet,” Mr. Szucs said.
He said he expects it will take Pratt & Whitney, a subsidiary of US aerospace giant RTX Corp., until early 2028 to resolve its geared turbofan engines fixes.
Cebu Pacific currently has 16 Airbus A320neo family jets — out of a fleet of 91 planes — grounded and awaiting engine fixes.
Mr. Szucs said the airline’s annual growth target for 2025 will be in the range of 13% to 15%. The airline’s goal for this year had been as high as 25%, he said.
Nonetheless, the airline’s latest target is “still a very healthy growth rate on a full-year basis,” he said, adding it is “not where we’d like to be.”
The airline expects third-quarter capacity to grow in the single-digits, reflecting the year’s weakest travel period, Mr. Szucs said. Cebu Pacific is holding more aircraft for its peak final quarter and the Christmas season. — Bloomberg
US to seal Southeast Asia trade deals in coming months, trade representative says
KUALA LUMPUR — The United States expectsto finalise trade deals with more Southeast Asian countries in the coming months, US Trade Representative Jamieson Greer said during a meeting with regional counterparts on Wednesday.
Greer was speaking in Kuala Lumpur at the start of a meeting with economic ministers from the 10-member Association of Southeast Asian Nations, amid concerns within the export-reliant bloc over the impact of US tariffs on their economies.
Tariff rates have been set at 19% and 20% for most of the region. Laos and Myanmar have been hit with a 40% rate, while Singapore has a 10% tariff.
Greer said talks with respective countries on the levies have been progressing well, with agreements to be finalised “in the coming months or even weeks, for some.”
“We believe that there are many areas where our interests align, and we can work together to achieve shared goals of bringing reciprocity and balance to the global trading system,” he said.
Indonesia and Vietnam have already negotiated new trade deals with the United States, securing lower tariffs in the process.
But Vietnam, the world’s sixth-largest exporter to the United States, risks losing $25 billion annually as a result of the 20% tariff imposed on its goods, which would make it the worst-hit economy in the region, according to estimates released by the United Nations Development Programme.
Wednesday marked Greer’s first meeting with the ASEAN bloc, whose members have largely engaged in separate negotiations with the United States on the issue of tariffs.
But the grouping may be driven to take a more unified position amid risks of steeper sectoral tariffs on industries such as semiconductors, a significant contributor to economies like Thailand, Malaysia, and Vietnam.
US President Donald Trump said last month he would set a tariff of about 100% on semiconductors, but it would not apply to companies that are manufacturing in the United States or have committed to do so. — Reuters
Savoring the art of living with Ascott BGC’s ‘Casa Capiz’
An event under the brand signature Ascott Soiree, themed after various art forms, ‘Casa Capiz’ highlighted visual arts, couture, and culinary arts
For Ascott Bonifacio Global City Manila, the goal transcends making guests feel at home in the country’s premier lifestyle and business district. It’s about understanding that their modern-day highfliers have seen it all, and should be treated with curated experiences that highlight understated luxury, leading them to savor the art of living.
In its latest effort to curate art-inspired experiences that make every stay a masterpiece of living, Ascott BGC opened the doors to an event titled “Casa Capiz” on Aug. 26 at its Penthouse and Scott’s Restaurant. The special gathering was part of the brand signature called Ascott Soiree, or a collection of in-property programs and local collaborations themed after various art forms, including performing arts, visual arts, couture and culinary arts.
“At Ascott BGC, we are always in search of ways not only to celebrate the elegance and sophistication that define our brand, but also the rich cultural heritage that makes the Philippines so unique,” said Faith Quijano, Assistant Residence Manager & Country Sustainability Co-Champion at The Ascott Limited Philippines. “Through ‘Casa Capiz,’ we pay homage to our local artisans for pouring their hearts, skill, and legacy into shaping their arts.”
Ascott BGC’s “Casa Capiz” showcased one of the unique, quintessential textures in Filipino decor, the Capiz shell. Directly translating to “Capiz House,” the event was designed to feel like an elevated yet warm home gathering. Moreover, as an Ascott Soiree event, the event also highlighted the wonders of culinary arts, particularly the masterful creations of Scott’s Restaurant Executive Chef Prince Patiño.
Chef Prince created a four-course degustation that’s a creative Filipino reinterpretation of Spanish classics. The menu includes Seafood Consommé; Adobo Croquettes; Slow-cooked Australian Mulwarra Beef Tenderloin; and the TAMIS Trio, a sweet finale featuring Toasted Rice Cheesecake, Mango Brazo de Mercedes, and Turon. Launched as well as part of Scott’s menu were several buffet dishes, from which the degustation was derived.
Aside from highlighting culinary arts, Ascott BGC’s “Casa Capiz” also presented collaborations with groups that champion the elegant, timeless beauty of the iridescent shell.
The event’s craftsmanship partner, for example, is Bataan Shell Craft Trading. The group showcases exquisite creations meticulously handmade by local artisans in the municipality of Samal, transforming nature’s beauty into timeless art, from refined home décor to thoughtful keepsakes. Meanwhile, Sensewear is a Manila-based experimental design studio that specializes in material manipulation, particularly of Capiz and mother-of-pearl. The brand hopes to push Filipino design beyond the expected “resort aesthetic” and into a realm of transcendental, sensory-driven objects. Lastly, Anna Cheung Couture celebrates Filipino craftsmanship and slow fashion, reimagining tradition for the contemporary Filipina. Among its standout creations is “Flame in Bloom,” a striking red couture piece made from Capiz, blending elegance with cultural pride.
These brands were each given the chance to advance their shared cause during Ascott BGC’s “Casa Capiz.” The event began with welcome cocktails and a craftsmanship display, featuring the “Capiz Wine Cooler,” a collaborative piece between Senseware and Ascott BGC. As an archive design reimagined in the hospitality setting, it marks the first of many intersections between the sensory philosophy of Senseware and the refined world of Ascott. Then, following a speech by Ascott BGC General Manager Rennan Reyes, emphasizing the importance of such events for Ascott, the representatives of the partner-brands enlightened the special guests on what makes Capiz special. This was followed by Anna Cheung Couture taking the stage with a fashion show that featured the night’s centerpiece. The event proceeded to Scott’s for the launch of the new menu, culminating in a fun raffle draw and a toast to the unique celebration.
“Casa Capiz” sets the ball in motion for Ascott BGC’s effort to highlight the precious material. The property is preparing for the Casa Capiz-themed suite launch. Also scheduled is a meaningful Christmas Tree Lighting event that will raise funds for the Capiz community that Bataan Shell Craft Trading supports.
Aside from an Ascott Soiree like the “Casa Capiz” event, the other Ascott brand signatures include lobby installation art, comprised of curated artworks that represent the overall theme of the property in an impactful manner without being too ornate, along with themed suites, featuring design artfully infused with the property’s theme. There’s also Ascott Artisan, or a confident and elegant individual who embodies and delivers the hallmarks of an art-inspired Ascott Experience, dedicated to making each guest’s stay more meaningful.
More information about Ascott Bonifacio Global City Manila is available at www.discoverasr.com/en/ascott-the-residence/philippines/ascott-bonifacio-global-city-manila. For more details on The Ascott Limited Philippines, visit www.discoverasr.com/the-ascott-limited and follow the group on Facebook, Instagram, TikTok and LinkedIn.
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Work-from-Home 2.0: The wellness workspace
Working from home is no longer just about a functional desk and a high-grade laptop. The new “in” is creating a wellness workspace that encourages productivity but also makes you feel good while you’re in it. Here’s where biophilic design makes its mark. It taps into our natural connection to the outdoors, enhancing cognitive function and creativity while reducing stress. Think of it as bringing nature into your workspace, not in a literal jungle-in-your-room way, but in subtle, thoughtful choices that refresh your headspace every day.
While biophilic design is a subject that deserves an entire deep dive of its own, this guide is going to give you a few tips on how you can use them to set up your own makeshift office.
Let the Light In
Position your desk perpendicular to the window to avoid screen glare while still soaking up natural light. If late-night work is part of your routine, pair your study or working table with a simple desk lamp that gives warm, even light. Natural light keeps your mood in check, and the right lamp keeps your focus on point when the sun goes down.
Choose natural-inspired tones
Colors matter more than you think. A neutral base paired with earthy shades can instantly set a calming tone for your working space. Textured wallpaper is an easy backdrop that mimics organic patterns, giving your room a soft, grounded feel. Add a modern wall clock for a sleek accent that keeps you mindful of time.
Shapes That Flow
Nature is rarely about sharp corners. Instead, it thrives in curves and organic lines. You can bring that energy into your workspace through a soft-textured carpet that breaks up the hard edges of your room. It’s a small switch, but it makes the space feel more alive and less rigid.
Go Organic with Simple Details
Floating shelves do more than hold books and files, they free up desk space and draw the eye upward, making the room feel airy. Add in small details like organizers set or a pen holder to keep your desk clutter-free. A clear workspace equals a clear head.
Little Green Friends
Nothing says biophilic design like actual plants. Go for low-maintenance greenery or air-filtering plants that thrive indoors, like snake plants or succulents. Place them on your desk or shelves for that extra pop of life. If plants aren’t your thing, hang nature-inspired art or place something that moves like a small fish tank or fish bowl for betta fishes to achieve a similar effect.
Layer the Details
Sometimes, it’s the small things that bring it all together. A scandinavian chair, or the swivel version if you like a bit of spin, anchors your setup with both comfort and style. Layer in natural aromas with a diffuser or scented candle, and suddenly your workspace feels alive.
The Wellness Effect
A wellness workspace is about curating little details that connect you to nature, ease your stress, and make working from home less of a grind. With a mix of simple little details, and thoughtful design choices, you’ll find yourself looking forward to sitting at your desk every day.
At the end of it, wellness workspace is about how your workspace makes you feel, and when it feels this good, productivity is just a bonus.
Start your own biophilic-inspired upgrade with curated picks like tables, chairs, carpets, and décor pieces available at your nearest Wilcon Depot or Do It Wilcon store.
For more information about Wilcon, visit www.wilcon.com.ph or follow their social media accounts on Facebook, Instagram, and TikTok, or subscribe and connect with them on Viber Community, LinkedIn, and YouTube. Or you may contact Wilcon Depot Hotline at 88-WILCON (88-945266) for inquiries.
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World Traveller launches ‘Travel Tales’ with Kach Umandap
World Traveller champions meaningful journeys, equipping Filipinos to See the World with the right mindset, the right stories, and the right gear
Travel isn’t just about the destinations we reach — it’s about the stories we bring home. This is the vision behind Travel Tales, a new talk series by World Traveller that champions authentic travel experiences through the voices of seasoned explorers.
For its inaugural session, World Traveller featured Kach Umandap, the youngest Filipina to journey across all 195 countries with a Philippine passport. In a live preview at Newport Mall, Kach went beyond her milestone to share the realities of traveling solo, busting myths and misconceptions many Filipinos have about visas, and shared smart travel hacks, and cultural encounters that shaped her global journey.
She revealed the simple tools that became her trusted travel companions — including her bright Dubai Lime Punch luggage from World Traveller, which she says is more than just stylish. “It’s so practical — with its neon color, I can always spot it immediately at the baggage claim carousel. It saves me time and keeps my travels stress-free,” she shared. She also led a session on first-time traveler myths — debunking common beliefs like “weekend bookings are cheapest” or “a return ticket is always required.”
Instead, she armed the audience with actionable insights: book midweek for better deals, use onward tickets to satisfy immigration, and follow airlines’ newsletters for hidden promos.
To complement her stories, the event featured a live packing demonstration with World Traveller luggage and The Travel Club’s smart travel essentials — from World Traveller packing cubes that maximize space, to World Traveller Digital Weighing Scales that save travelers from unexpected airport fees.
“Travel Tales is our way of bringing real journeys closer to people,” shared by Ruby Palma, AVP of World Traveller. “Kach’s story proves that travel isn’t just about ticking off countries — it’s about preparation, discovery, and meaningful connections. Our mission has always been to equip modern explorers with the right travel gear and inspire them to see the world with confidence.” Through Travel Tales, World Traveller reinforces its mission to equip and inspire modern explorers, proving that with the right mindset and the right gear, every trip — whether across oceans or across town — becomes a story worth telling.
Guests and mall-goers are invited to visit The Travel Club Newport store at the 2nd level to explore the latest World Traveller collections and enjoy exclusive offers until Sept. 21, 2025. Don’t miss the World Traveller Giant Luggage installation at the Ground Floor of Newport Mall — snap a photo, tag us on Instagram, and get a chance to win a special prize!
To stay updated on the latest collections, travel tips, and future Travel Tales sessions, visit www.worldtraveller.com.ph and follow World Traveller on social media for the latest happenings.
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House halts flood control probe, gives way to independent commission
The House of Representatives will suspend its investigation into anomalous flood control deals to pave the way for a “full and impartial” probe by the government’s fact-finding body, a congressman said on Wednesday.
Speaker Faustino “Bojie” Dy III will turn over all documents the House joint infrastructure committee has collected during its hearings into bogus flood control contracts to the Independent Commission on Infrastructure (ICI), Party-list Rep. Terry L. Ridon said in a media briefing.
He said the joint House panel investigating questionable flood control infrastructure would hand over a trove of evidence, including testimonies linking top officials “in the Executive and Legislative” to substandard or nonexistent flood mitigation structures in Bulacan province.
“We are announcing the suspension of proceedings of the House Infrastructure Committee to give way to the full and impartial proceedings of the ICI,” he said, adding the congressional panel is willing to cooperate with the fact-finding body.
The Philippines is facing a widening scandal over billions of pesos worth of flood control projects, with Congress launching separate investigations amid allegations of kickbacks tied to public works contracts.
Lawmakers have traded accusations during parallel hearings, raising concerns over the credibility of the inquiries.
President Ferdinand R. Marcos, Jr. has formed an independent commission to investigate anomalies in flood control and other infrastructure projects, with authority to recommend criminal, civil, and administrative charges.
Mr. Dy on Monday said the House should let the independent commission take the lead in the investigation into bogus flood control contracts. “Most Filipinos no longer believe what’s being uncovered in the House committee,” he told reporters in Filipino.
Mr. Ridon said the House joint committee will keep its inquiry suspended “for as long as the ICI is… doing the work for transparency, accountability and justice.”
The Marcos administration has been rocked by an unfolding flood control scandal involving substandard, incomplete, or nonexistent infrastructure in a country regularly battered by flooding.
The controversy stems from Mr. Marcos’ revelation in August that more than 6,000 flood control projects launched since 2022 lacked key details. About P545 billion has been allocated for flood control since then, with P100 billion cornered by top contractors. — Kenneth Christiane L. Basilio
Trump’s new visa fees spur offshoring talks, hiring turmoil
SAN FRANCISCO/NEW YORK — The Trump administration’s hefty new visa fees for H-1B workers have prompted high-level talks inside companies in Silicon Valley and beyond on the possibility of moving more jobs overseas – precisely the outcome the policy was meant to stop.
US President Donald Trump on Friday announced the change to the visa program that has long been a recruitment pathway for tech firms and encouraged international students to pursue postgraduate courses in the US
While the $100,000 levy applies only to new applicants – not current holders as first announced – the confusion around its roll-out and steep cost are already leading companies to pause recruitment, budgeting and workforce plans, according to Reuters interviews of founders, venture capitalists and immigration lawyers who work with technology companies.
“I have had several conversations with corporate clients … where they have said this new fee is simply unworkable in the US, and it’s time for us to start looking for other countries where we can have highly skilled talent,” said Chris Thomas, an immigration attorney at Colorado-based law firm Holland & Hart. “And these are large companies, some of them household names, Fortune 100 type companies, that are saying, we just simply cannot continue.”
About 141,000 new applications for H-1B were approved in 2024, according to Pew Research. Though Congress caps new visas at 65,000 a year, total approvals run higher because petitions from universities and some other categories are excluded from the cap. Computer-related jobs accounted for a majority of the new approvals, the Pew data showed.
Companies were already weighing an expansion in India before the new visa fee disrupted hiring. Reuters reported exclusively on Tuesday that Accenture has proposed a new campus in the southern state of Andhra Pradesh, with plans to eventually add about 12,000 jobs in the country, where it has its largest workforce.
FIRMS WILL CUT H-1B WORKERS
The Trump administration and critics of the H-1B program have said that it has been used to suppress wages and curbing it opens more jobs for US tech workers. The H-1B visa program has also made it more challenging for college graduates trying to find IT jobs, Trump’s announcement on Friday said.
The visa previously cost employers only a few thousand dollars. But the new $100,000 fee would flip the equation, making hiring talent in countries like India – where wages are lower and Big Tech now builds innovation hubs instead of back offices – more attractive, experts and executives told Reuters.
“We probably have to reduce the number of H-1B visa workers we can hire,” said Sam Liang, co-founder and CEO of popular artificial intelligence meeting agent start-up Otter.ai. “Some companies may have to outsource some of their workforce – hire maybe in India or other countries just to walk around this H-1B problem.”
BAD FOR STARTUPS
While conservatives have long applauded Trump’s wide-ranging immigration crackdown, the H-1B move has drawn support from some liberal quarters as well.
Netflix co-founder and well-known Democratic donor Reed Hastings – who said he has followed H-1B politics for three decades – argued on X that the new fees would remove the need for a lottery and instead reserve visas for “very high value jobs” with greater certainty.
But Deedy Das, a partner at venture capital firm Menlo Ventures that has invested in startups such as AI firm Anthropic, said “blanket rulings like this are rarely good for immigration” and would disproportionately affect startups.
Unlike large technology companies whose compensation packages are a combination of cash and stock, pay packages of startups typically lean toward equity as they need cash to build the business.
“For larger companies, the cost is not material. For smaller companies, those with fewer than 25 employees, it’s much more significant,” Das said. “Big tech CEOs expected this and will pay. For them, fewer small competitors is even an advantage. It’s the smaller startups that suffer most.”
INNOVATION AT RISK
The policy could also mean fewer of the talented immigrants who often go on to launch new firms, analysts said.
More than half of US startups valued at $1 billion or more had at least one immigrant founder, according to a 2022 report from the National Foundation for American Policy, a nonpartisan think tank based in Virginia.
Several lawyers said startups they represent are pinning hopes on lawsuits that argue that the administration overstepped by imposing a fee beyond what Congress envisioned, betting that courts would dilute the rule before costs cripple hiring.
If not, “we will see a pullback from the smartest people around the world,” said Bilal Zuberi, founder of Silicon Valley-based venture capital firm Red Glass Ventures, who began his career in the US on an H-1B visa. — Reuters
Who stopped the UN escalator? Likely Trump’s videographer, says UN
UNITED NATIONS – The United Nations believes it has solved the mystery of why an escalator abruptly stopped shortly after US President Donald Trump stepped onto it on Tuesday – his videographUNer may have accidentally triggered a safety mechanism.
Trump jokingly complained about the incident during his speech to world leaders earlier on Tuesday after the teleprompter also didn’t work.
“These are the two things I got from the United Nations – a bad escalator and a bad teleprompter,” he told the 193-member assembly, to some laughter.
However, White House Press Secretary Karoline Leavitt wasn’t so lighthearted about it.
“If someone at the UN intentionally stopped the escalator as the President and First Lady were stepping on, they need to be fired and investigated immediately,” she posted on X after the incident.
UN spokesperson Stephane Dujarric said a readout of the escalator’s central processing unit indicated it “had stopped after a built-in safety mechanism on the comb step was triggered at the top of the escalator.”
He said Trump’s videographer had been traveling backwards up the escalator to capture his arrival with First Lady Melania Trump.
“The videographer may have inadvertently triggered the safety function,” Dujarric said in a statement. “The safety mechanism is designed to prevent people or objects accidentally being caught and stuck in or pulled into the gearing.”
The White House did not immediately respond to a request for comment on the UN findings.
On the teleprompter, Trump told the General Assembly on Tuesday: “I can only say that whoever’s operating this teleprompter is in big trouble.”
However, a UN official said the White House had operated its own teleprompter.
After Trump finished speaking, UN General Assembly President Annalena Baerbock said: “The UN teleprompters are working perfectly.” — Reuters
DigiPlus files for licenses in South Africa
DigiPlus Interactive Corp. has filed applications for three licenses in South Africa, marking its second international expansion following its entry into the Brazilian market.
The company submitted applications to the Western Cape Gambling and Racing Board for a national manufacturer license, a bookmaker license, and a bookmaker premises license, DigiPlus said in a disclosure on Wednesday.
“The filing of our online gaming license in South Africa marks another milestone in DigiPlus’ global growth journey, as we bring our proven track record of innovation, responsible gaming, and player protection, together with our strength in localizing games for diverse markets, to one of Africa’s most dynamic economies,” said DigiPlus Chairman Eusebio H. Tanco. — Alexandria Grace C. Magno
China to forego Special and Differential Treatment in future WTO negotiations
GENEVA – China announced on Tuesday it will forego asking for the benefits it gains from its developing country status at the World Trade Organization, state-run news agency Xinhua and the Director-General of the WTO stated.
Xinhua reported that China’s Premier Li Qiang announced his country will no longer seek access to Special and Differential Treatment in current and new WTO agreements during a meeting on the sidelines of the UN General Assembly in New York.
“This is a culmination of many years of hard work and I want to applaud China’s leadership on this issue,” WTO Director-General Ngozi Okonjo-Iweala said in a statement posted on X.
Previously, Washington had argued there could be no meaningful WTO reform until China and other major economies relinquish the SDT granted to developing countries, which the U.S. says give them an unfair advantage.
Some major economies, including China and Saudi Arabia, self-identify as developing countries, granting them access to SDT benefits such as setting higher tariffs and using subsidies.
The U.S. opposes countries picking and choosing SDT benefits, and had wanted China to completely renounce them.
China’s announcement comes after months of trade tension between the world’s two largest economies over sweeping tariffs imposed by the U.S. and retaliatory measures by China.
China previously told Reuters its developing country status was non-negotiable, but that it was open to discussing SDT, subsidies and industrial policy as part of broader discussions on WTO reform, ahead of a 2026 ministerial meeting in Cameroon. — Reuters
Fed’s Powell strikes middle path on inflation, jobs, as others take sides
WASHINGTON – US Federal Reserve Chair Jerome Powell said on Tuesday the central bank needed to continue balancing the competing risks of high inflation and a weakening job market in coming interest rate decisions, even as his colleagues staked out arguments on both sides of the policy divide.
“Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation,” Powell said in remarks that stuck close to language used last week when the central bank cut its benchmark rate a quarter of a percentage point. The current rate, in the range of 4% to 4.25%, is still considered high enough to lean against price pressures in the economy, but “leaves us well positioned to respond to potential economic developments. Our policy is not on a preset course,” Powell said.
While that phrase is something of a mantra for central bankers, it has taken on particular resonance now, with strong opinions emerging on both side of the policy divide.
In remarks before Powell spoke on Tuesday, Fed Vice Chair for Supervision Michelle Bowman said the Fed could downplay concerns about persistent inflation and needed to make a commitment to cut rates in support of a job market she worries may be about to rupture.
“It’s a lot easier to support the labor market by lowering the federal funds rate than it is to fix it after it’s broken,” Bowman said. While the jobless rate at 4.3% is around estimates of full employment, Bowman said the slowdown in hiring is such that “it is time for the Committee to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility” with steady rate cuts.
“If demand conditions do not improve, businesses may need to begin to lay off workers,” she said.
By contrast, regional Fed Reserve Bank presidents who spoke this week recommended caution about further rate cuts while inflation remained nearly a percentage point above the central bank’s target and the impact of the administration’s tariffs and other policies is still being assessed.
“With inflation having been over the target for four and a half years in a row and rising, I think we need to be a little careful with getting overly upfront aggressive,” Chicago Fed President Austan Goolsbee said on CNBC on Tuesday.
The Fed next meets on October 28-29, with investors assigning a high probability that officials will cut interest rates again, consistent with projections issued after last week’s meeting showing quarter-point cuts anticipated in October and December.
But opinion remains divided, with Powell for now steering a noncommittal path with further data to come on jobs and inflation.
While job market concerns are now competing more with high inflation in the minds of Fed officials, Powell said there was no “risk-free path” for the Fed to follow at the moment.
In comments prepared for delivery to Rhode Island’s Greater Providence Chamber of Commerce, Powell offered little indication of when he thinks the Fed might next cut interest rates, noting that there was danger to both cutting too fast and risking a new surge of inflation, or reducing rates too slowly and possibly causing unemployment to rise unnecessarily.
“If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore two percent inflation. If we maintain restrictive policy too long, the labor market could soften unnecessarily,” Powell said.
Powell agreed there is reason to be concerned about the job market, with recent job growth averaging around 25,000 for the past three months “running below the ‘breakeven’ rate needed to hold the unemployment rate constant.”
But other job indicators were “broadly stable,” he said.
Inflation meanwhile remained “somewhat elevated,” with tariffs driving goods prices higher. While that impact will likely fade, he said, it will take time, and it was up to the Fed to “make sure that this one-time increase in prices does not become an ongoing inflation problem.”
Powell spoke at a time when the Fed is under intense pressure from the Trump administration to cut rates, with an effort by the president to fire Governor Lisa Cook pending before the Supreme Court, and administration officials challenging the wisdom of Fed emergency programs during the pandemic and during the 2007 to 2009 economic crisis.
Powell said those efforts, under extraordinary circumstances, likely helped the economy avoid far worse outcomes.
“These two back-to-back world historical crises have left behind scars that will be with us for a long time. In democracies around the world, public trust in economic and political institutions has been challenged. Those of us who are in public service at this time need to focus tightly on carrying out our critical missions to the best of our ability in the midst of stormy seas and powerful crosswinds,” said Powell, whose term as chair ends in May, with Trump already mulling his successor.
“Despite these two unique, extremely large shocks, the US economy has performed as well or better than other large, advanced economies around the world.” — Reuters