Finance

China’s Xi Jinping meets with U.S. national security advisor Jake Sullivan

Published

4 months ago

August 29, 2024

US National Security Advisor Jake Sullivan shakes hands with China’s President Xi Jinping during their meeting at the Great Hall of the People in Beijing on August 29, 2024.

Trevor Hunnicutt

BEIJING — Chinese President Xi Jinping told U.S. national security advisor Jake Sullivan during a meeting Thursday that Beijing hopes Washington will find “a right way” to get along.

“While great changes have taken place in the two countries and in China-U.S. relations, China’s commitment to the goal of a stable, healthy and sustainable China-U.S. relationship remains unchanged,” Xi said, according to an English-language release shared by China’s Ministry of Foreign Affairs.

Tensions between the world’s two largest economies have escalated in recent years, spilling over from trade into finance and technology.

The Chinese leader said Thursday he hopes the U.S. would view China’s development “in a positive” light and “work with China to find a right way for two major countries to get along with each others,” according to Beijing.

China's 'appetite and dreams' about Taiwan are still there, says CFR's Richard Haass

Sullivan, advisor to the outgoing Biden administration, arrived in Beijing Tuesday for two days of meetings with Wang Yi, China’s top diplomat.

On Thursday, Sullivan met with Zhang Youxia, vice chairman of the Chinese Communist Party’s Central Military Commission.

This is Sullivan’s first trip to China as national security advisor, despite having met multiple times with Wang in recent years.

The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.

U.S. President Joe Biden and Xi have decided to speak by phone in “coming weeks,” the White House said Wednesday. Sullivan is scheduled to depart China later Thursday.

While the outcome of November’s U.S. presidential election remains unclear, being tough on Beijing is a rare issue that both U.S. political parties agree on.

Biden dropped out of the U.S. presidential race this summer, endorsing his Vice President Kamala Harris as the Democrat nominee.

Harris’ current national security advisor, Phil Gordon, said in May at a Council on Foreign Relations event that the “China challenge” is much greater than Taiwan, and requires ensuring that Beijing “doesn’t have the advanced technology, intelligence and military capabilities that can challenge us.”

Finance

Slower pace ahead for rate cuts

Published

2 hours ago

January 8, 2025

Business Finance News

Federal Reserve officials at their December meeting expressed concern about inflation and the impact that President-elect Donald Trump‘s policies could have, indicating that they would be moving more slowly on interest rate cuts because of the uncertainty, minutes released Wednesday showed.

Without calling out Trump by name, the meeting summary featured at least four mentions about the impact that changes in immigration and trade policy could have on the U.S. economy.

Since Trump’s November election victory, he has signaled plans for aggressive, punitive tariffs on China, Mexico and Canada as well as the other U.S. trading partners. In addition, he intends to pursue more deregulation and mass deportations.

However, the extent of what Trump’s actions will be and specifically how they will be directed creates a band of ambiguity about what is ahead, which Federal Open Market Committee members said would require caution.

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes said. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”

FOMC members voted to lower the central bank’s benchmark borrowing rate to a target range of 4.25%-4.5%.

However, they also reduced their outlook for expected cuts in 2025 to two from four in the previous estimate at September’s meeting, assuming quarter-point increments. The Fed cut a full point off the funds rate since September, and current market pricing is indicating just one or two more moves lower this year.

Minutes indicated that the pace of cuts ahead indeed is likely to be slower.

“In discussing the outlook for monetary policy, participants indicated that the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing,” the document said.

Moreover, members agreed that “the policy rate was now significantly closer to its neutral value than when the Committee commenced policy easing in September. In addition, many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters.”

Those conditions include inflation readings that remain above the Fed’s 2% annual target, a solid pace of consumer spending, a stable labor market and otherwise strong economic activity in which gross domestic product had been growing at an above-trend clip through 2024.

“A substantial majority of participants observed that, at the current juncture, with its policy stance still meaningfully restrictive, the Committee was well positioned to take time to assess the evolving outlook for economic activity and inflation, including the economy’s responses to the Committee’s earlier policy actions,” the minutes said.

Officials stressed that future policy moves will be dependent on how the data unfolds and are not on a set schedule. The Fed’s preferred gauge showed core inflation running at 2.4% rate in November, and 2.8% when including food and energy prices, compared with the prior year. The Fed target’s inflation at 2%.

In documents handed out at the meeting, most officials indicated that while they see inflation gravitating down to 2%, they don’t forecast that happening until 2027 and expect that near-term risks are to the upside.

At his news conference following the Dec. 18 rate decision, Chair Jerome Powell likened the situation to “driving on a foggy night or walking into a dark room full of furniture. You just slow down.”

That statement reflected that mindset of meeting participants, many of whom “observed that the current high degree of uncertainty made it appropriate for the Committee to take a gradual approach as it moved toward a neutral policy stance,” the minutes said.

The “dot plot” of individual members’ expectations showed that they expect two more rate cuts in 2026 and possibly another one or two after, ultimately taking the long-run fed funds rate down to 3%.