US central bank leaves interest rates unchanged
The Fed's decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.
Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump's sweeping tariffs.
Powell and other Fed officials say they want to see how Trump's duties on imports will affect inflation and the broader economy.
So far the duties have lifted costs of some goods such as appliances, furniture and toys and overall inflation has risen slightly although less than many economists had expected.
There were some signs of splits in the Fed's ranks: governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs while nine officials, including Powell, favoured standing pat.
It is the first time in more than three decades that two of the seven Washington DC-based governors have dissented.
One official, governor Adriana Kugler, was absent and did not vote.
The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly urged the central bank to reduce borrowing costs.
The US Federal Reserve has left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.
The Fed's decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.
Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump's sweeping tariffs.
Powell and other Fed officials say they want to see how Trump's duties on imports will affect inflation and the broader economy.
So far the duties have lifted costs of some goods such as appliances, furniture and toys and overall inflation has risen slightly although less than many economists had expected.
There were some signs of splits in the Fed's ranks: governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs while nine officials, including Powell, favoured standing pat.
It is the first time in more than three decades that two of the seven Washington DC-based governors have dissented.
One official, governor Adriana Kugler, was absent and did not vote.
The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly urged the central bank to reduce borrowing costs.
The US Federal Reserve has left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.
The Fed's decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.
Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump's sweeping tariffs.
Powell and other Fed officials say they want to see how Trump's duties on imports will affect inflation and the broader economy.
So far the duties have lifted costs of some goods such as appliances, furniture and toys and overall inflation has risen slightly although less than many economists had expected.
There were some signs of splits in the Fed's ranks: governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs while nine officials, including Powell, favoured standing pat.
It is the first time in more than three decades that two of the seven Washington DC-based governors have dissented.
One official, governor Adriana Kugler, was absent and did not vote.
The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly urged the central bank to reduce borrowing costs.
The US Federal Reserve has left its key short-term interest rate unchanged for the fifth time this year, brushing off repeated calls from President Donald Trump for a cut.
The Fed's decision on Wednesday leaves its key short-term rate at about 4.3 per cent, where it has stood after the US central bank reduced it three times last year.
Chair Jerome Powell has said the Fed would likely have cut rates already if not for Trump's sweeping tariffs.
Powell and other Fed officials say they want to see how Trump's duties on imports will affect inflation and the broader economy.
So far the duties have lifted costs of some goods such as appliances, furniture and toys and overall inflation has risen slightly although less than many economists had expected.
There were some signs of splits in the Fed's ranks: governors Christopher Waller and Michelle Bowman voted to reduce borrowing costs while nine officials, including Powell, favoured standing pat.
It is the first time in more than three decades that two of the seven Washington DC-based governors have dissented.
One official, governor Adriana Kugler, was absent and did not vote.
The choice to hold off on a rate cut will almost certainly result in further conflict between the Fed and White House, as Trump has repeatedly urged the central bank to reduce borrowing costs.
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ABC News
4 hours ago
- ABC News
Did Donald Trump just give China a major advantage on AI?
Last month, the Trump administration quietly reversed one of its own policies by lifting a ban on US tech giant Nvidia's H20 microchip exports to China. For anyone who has followed Donald Trump's erratic record on trade, another U-turn might not sound like a notable development. But this time, the stakes are much higher because these microchips are critical to powering the next generation of artificial intelligence. Whichever country dominates microchip production will likely lead the global AI race, with massive implications for military strategy and economic output. For nearly three years, the US has tried to keep these powerful chips out of China's hands. Now, by reopening the door, has Mr Trump handed Beijing a major advantage on AI? We spoke to three experts to explain how we got here. Back in April, the Trump administration banned H20 microchip exports to China, toughening restrictions put in place by the Biden administration. It has since reversed that decision. According to Jason Van Der Schyff, a fellow at Australian Strategic Policy Institute's technology and security program, this backflip may be in response to the booming black market demand for high-powered US chips in China. "Over a billion dollars worth of restricted chips were smuggled into China in just a few months," he said. "The reversal may be a pivot by the administration, recognising if you don't offer a legal channel for the slightly degraded chips, buyers will simply go around you." Professor Shahriar Akter, who specialises in the study of advanced analytics and AI at the University of Wollongong said this move seems to follow "a philosophy in Silicon Valley that if you sell more" it will pour more back into "your research and development". Associate Professor in Information Systems at Curtin University, Mohammad Hossain, suggested the Trump administration is trying to kill two birds with one stone. The US is trying to maintain leverage in a broader geopolitical trade-off involving China's critical exports, rare earth elements, while "keeping China dependent on US technology", he said. Nvidia is the tech giant behind these highly sought after microchips and it is led by CEO Jensen Huang who is the ninth-richest man in the world. The H20 is a step-down from Nvidia's top-tier chips (H100 and B200) and was specifically designed to comply with US export restrictions while catering to the Chinese market. "Basically, [H100 and B200 chips] can do things much faster than the H20," Mr Van Der Schyff said. "If we consider how quickly AI is moving any impediment that could be brought to time more than anything is going to maintain that US strategic advantage." While the H20 is less powerful, Mr Van Der Schyff warns that "these aren't toys … even slightly downgraded chips still enable model training at scale". "If you're concerned about national security, letting an adversary access chips that are only one rung down the ladder still poses a strategic risk." While the US hopes to stall China's progress in artificial intelligence, experts warn this strategy may have the opposite effect. China's push to dominate AI is already underway and restricting exports to only H20 chips incentivises them to accelerate domestic developments. "At present in the world, 50 per cent of AI researchers are being produced by China alone," Dr Akter said. Chinese tech giants like Huawei and Biren Technology have been ramping up their own AI accelerators. "Huawei's chips are already being deployed in major training clusters," Mr Van Der Schyff said. Still, China's domestic developments trail behind industry leaders like Taiwan's TSMC and South Korea's Samsung when it comes to cutting-edge manufacturing. "There isn't necessarily a danger that China catches up overnight but these restrictions do however give Beijing a clear incentive to sort of go all in on industrial policy for their own semiconductors to accelerate domestic progress," Mr Van Der Schyff said. "We've seen this play out previously with 5G and also with aviation." All three experts cautioned that it's difficult to gauge China's true AI capabilities. "Given the closed nature of China's systems and their propensity to not always tell us the truth", it's unclear how much China's artificial intelligence has developed, Mr Van Der Schyff said. Dr Akter used an analogy to explain the uncertainty: "There are two types of AI technologies", one is called glass box and the other is called black box. "Glass box technology is basically explainable AI, which is open source and we can explain where data is coming from and how it is being used to develop AI models and what would be the outcome." Whereas, black box technology is the opposite, we cannot trace back to the source of the data and we cannot tell what models have been used. That opacity makes it difficult for the rest of the world to assess whether Beijing is playing catch-up or quietly pulling ahead. The country that has the upper hand in microchip production will likely lead the global AI race and that has significant repercussions, experts said. "The country that dominates compute will dominate AI, and AI will shape everything from military planning to economic productivity."
The Age
5 hours ago
- The Age
Trump's crypto mania poses a risk for our super
This distinct lack of guardrails, and the well-known volatility of crypto – data shows that over the past decade the cryptocurrency market has been almost five times as volatile as the US sharemarket – is one thing when it's young investors who are eager to take high risk for possible high reward. But it's another when people's retirements are involved. One of the most likely reasons for this loosening of regulations (gold and private investments are also set to be added to what US funds can invest in) is that the industry is under increasing pressure globally to find new investment options and maximise returns because of our ageing population. The pension system in the UK, for example, is expected to reach a crisis point within the next two decades, with many people predicted to retire with less than they may have expected. Loading You can see, then, why cryptocurrency suddenly looks promising. But here is where another likely reason for this shift also arises and, depending on your politics, is either a problem so glaring it might as well be an entire herd of elephants in the room, or is simply shrewd business ingenuity. The US government is currently led by a man who, along with his family, has a bitcoin mining farm and reserve. They have launched their own crypto coins, stablecoin and crypto trading app. It's estimated that $US2.9 billion ($4.5 billion) of the Trump family's wealth – roughly 40 per cent – is tied to their digital investments. And on Wednesday, the White House launched a 160-page document outlining how the government will bring to life the president's promise to bolster digital assets. Trump isn't just pro-crypto, he's driving the pro-crypto bus. Again, investing and being hungry for risk is one thing. But when the money being invested is retirement funds, it's a different ball game. Considering cryptocurrencies are still such a new asset class, there's no long-term performance data to assess their suitability for super investments. But already, there is a cautionary tale to look to. In 2022, a Canadian pension plan for teachers that invested in crypto lost $147 million in invested funds following the collapse of digital currency exchange FTX. While retirement funds are worth billions and $147 million might not sound like all that much in the grand scheme of things, try telling that to the hardworking teacher who was a year away from retirement and suddenly faced working longer due to bad investments. Currently in Australia, the only way to invest in crypto using superannuation is through a self-managed fund. But two things are worth noting here. The first is that there are more than 600,000 self-managed funds, and that with more than $750 billion in assets, they represent roughly a third of our national super sector. The second is that in February, soon after Trump's return to the White House, Australia's industry leaders and Treasurer Jim Chalmers travelled to the US for a 'super summit', in an attempt to try to win over American financial executives and the US government. Loading Currently, about $US400 billion of our super is invested in US assets, which translates to roughly 14 per cent of all Australian investments. However, that's expected to grow to more than $US1 trillion over the next decade. Whether these assets will one day include crypto remains to be seen. But the fact that American funds – which have the biggest pool of money in the world – now can more freely look to crypto than ever before, and that Australia is so hungry to remain economically close to the US, is something that should make us sit up and pay attention. Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia's No.1 finance podcast, She's on the Money. She is also founder and director of Zella Money.
The Advertiser
10 hours ago
- The Advertiser
India will continue to buy Russian oil, officials say
India will keep purchasing oil from Russia despite US President Donald Trump's threats of penalties, two Indian government sources say, not wishing to be identified due to the sensitivity of the matter. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Trump indicated in a Truth Social post in July that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters that he had heard India would no longer be buying oil from Russia. The New York Times on Saturday quoted two unnamed senior Indian officials as saying there had been no change in Indian government policy, with one official saying the government had "not given any direction to oil companies" to cut back imports from Russia. Reuters reported this week that Indian state refiners stopped buying Russian oil in the past week after discounts narrowed in July. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," India's foreign ministry spokesperson Randhir Jaiswal told reporters during a regular briefing on Friday. Jaiswal said India had a "steady and time-tested partnership" with Russia, and that New Delhi's relations with various countries stood on their merit and should not be viewed from the prism of a third country. The White House did not immediately respond to requests for comment. Indian refiners are pulling back from Russian crude as discounts shrink to their lowest since 2022, when Western sanctions were first imposed on Moscow, due to lower Russian exports and steady demand, sources said earlier this week. The country's state refiners - Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd - have not sought Russian crude in the past week or so, four sources familiar with the refiners' purchase plans told Reuters. On July 14, Trump threatened 100 per cent tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the top supplier to India, responsible for about 35 per cent of India's overall supplies. Russia continued to be the top oil supplier to India during the first six months of 2025, accounting for about 35 per cent of India's overall supplies, followed by Iraq, Saudi Arabia and the United Arab Emirates. India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up one per cent from a year ago, according to data provided to Reuters by sources. Nayara Energy, a major buyer of Russian oil, was recently sanctioned by the European Union as the refinery is majority-owned by Russian entities, including oil major Rosneft. In July, Reuters reported that Nayara's chief executive had resigned after the imposition of EU sanctions and company veteran Sergey Denisov had been appointed as CEO. Three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions on the Russia-backed refiner, Reuters reported in July. India will keep purchasing oil from Russia despite US President Donald Trump's threats of penalties, two Indian government sources say, not wishing to be identified due to the sensitivity of the matter. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Trump indicated in a Truth Social post in July that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters that he had heard India would no longer be buying oil from Russia. The New York Times on Saturday quoted two unnamed senior Indian officials as saying there had been no change in Indian government policy, with one official saying the government had "not given any direction to oil companies" to cut back imports from Russia. Reuters reported this week that Indian state refiners stopped buying Russian oil in the past week after discounts narrowed in July. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," India's foreign ministry spokesperson Randhir Jaiswal told reporters during a regular briefing on Friday. Jaiswal said India had a "steady and time-tested partnership" with Russia, and that New Delhi's relations with various countries stood on their merit and should not be viewed from the prism of a third country. The White House did not immediately respond to requests for comment. Indian refiners are pulling back from Russian crude as discounts shrink to their lowest since 2022, when Western sanctions were first imposed on Moscow, due to lower Russian exports and steady demand, sources said earlier this week. The country's state refiners - Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd - have not sought Russian crude in the past week or so, four sources familiar with the refiners' purchase plans told Reuters. On July 14, Trump threatened 100 per cent tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the top supplier to India, responsible for about 35 per cent of India's overall supplies. Russia continued to be the top oil supplier to India during the first six months of 2025, accounting for about 35 per cent of India's overall supplies, followed by Iraq, Saudi Arabia and the United Arab Emirates. India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up one per cent from a year ago, according to data provided to Reuters by sources. Nayara Energy, a major buyer of Russian oil, was recently sanctioned by the European Union as the refinery is majority-owned by Russian entities, including oil major Rosneft. In July, Reuters reported that Nayara's chief executive had resigned after the imposition of EU sanctions and company veteran Sergey Denisov had been appointed as CEO. Three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions on the Russia-backed refiner, Reuters reported in July. India will keep purchasing oil from Russia despite US President Donald Trump's threats of penalties, two Indian government sources say, not wishing to be identified due to the sensitivity of the matter. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Trump indicated in a Truth Social post in July that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters that he had heard India would no longer be buying oil from Russia. The New York Times on Saturday quoted two unnamed senior Indian officials as saying there had been no change in Indian government policy, with one official saying the government had "not given any direction to oil companies" to cut back imports from Russia. Reuters reported this week that Indian state refiners stopped buying Russian oil in the past week after discounts narrowed in July. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," India's foreign ministry spokesperson Randhir Jaiswal told reporters during a regular briefing on Friday. Jaiswal said India had a "steady and time-tested partnership" with Russia, and that New Delhi's relations with various countries stood on their merit and should not be viewed from the prism of a third country. The White House did not immediately respond to requests for comment. Indian refiners are pulling back from Russian crude as discounts shrink to their lowest since 2022, when Western sanctions were first imposed on Moscow, due to lower Russian exports and steady demand, sources said earlier this week. The country's state refiners - Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd - have not sought Russian crude in the past week or so, four sources familiar with the refiners' purchase plans told Reuters. On July 14, Trump threatened 100 per cent tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the top supplier to India, responsible for about 35 per cent of India's overall supplies. Russia continued to be the top oil supplier to India during the first six months of 2025, accounting for about 35 per cent of India's overall supplies, followed by Iraq, Saudi Arabia and the United Arab Emirates. India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up one per cent from a year ago, according to data provided to Reuters by sources. Nayara Energy, a major buyer of Russian oil, was recently sanctioned by the European Union as the refinery is majority-owned by Russian entities, including oil major Rosneft. In July, Reuters reported that Nayara's chief executive had resigned after the imposition of EU sanctions and company veteran Sergey Denisov had been appointed as CEO. Three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions on the Russia-backed refiner, Reuters reported in July. India will keep purchasing oil from Russia despite US President Donald Trump's threats of penalties, two Indian government sources say, not wishing to be identified due to the sensitivity of the matter. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Trump indicated in a Truth Social post in July that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters that he had heard India would no longer be buying oil from Russia. The New York Times on Saturday quoted two unnamed senior Indian officials as saying there had been no change in Indian government policy, with one official saying the government had "not given any direction to oil companies" to cut back imports from Russia. Reuters reported this week that Indian state refiners stopped buying Russian oil in the past week after discounts narrowed in July. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," India's foreign ministry spokesperson Randhir Jaiswal told reporters during a regular briefing on Friday. Jaiswal said India had a "steady and time-tested partnership" with Russia, and that New Delhi's relations with various countries stood on their merit and should not be viewed from the prism of a third country. The White House did not immediately respond to requests for comment. Indian refiners are pulling back from Russian crude as discounts shrink to their lowest since 2022, when Western sanctions were first imposed on Moscow, due to lower Russian exports and steady demand, sources said earlier this week. The country's state refiners - Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd - have not sought Russian crude in the past week or so, four sources familiar with the refiners' purchase plans told Reuters. On July 14, Trump threatened 100 per cent tariffs on countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the top supplier to India, responsible for about 35 per cent of India's overall supplies. Russia continued to be the top oil supplier to India during the first six months of 2025, accounting for about 35 per cent of India's overall supplies, followed by Iraq, Saudi Arabia and the United Arab Emirates. India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up one per cent from a year ago, according to data provided to Reuters by sources. Nayara Energy, a major buyer of Russian oil, was recently sanctioned by the European Union as the refinery is majority-owned by Russian entities, including oil major Rosneft. In July, Reuters reported that Nayara's chief executive had resigned after the imposition of EU sanctions and company veteran Sergey Denisov had been appointed as CEO. Three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions on the Russia-backed refiner, Reuters reported in July.
