Breaking News updated: The Reserve Bank of New Zealand (RBNZ)
The Reserve Bank of New Zealand (RBNZ) cut the interest rate by 25 basis points to 3% earlier, potentially reducing it further if inflation eases further. There are three options: holding, a 25 bps rate cut, or a 50 bps rate cut, the latter two of which are highly anticipated.
Powell
Trump blamed the Federal Reserve Chair Powell for being too late in lowering the interest rate while hurting the housing sector, especially when core inflation is very sticky now, standing at 3.1%.
Restrictive interest rate → high mortgage rate → stained on the housing market sector and financial struggles.
The Stock market
Commerce Secretary Howard Lutnick has championed the idea, arguing “we should get an equity stake for our money,” but it remains a “creative” proposal without clear legal precedent. Although the government could potentially own a partial part of the Chip companies without voting rights (if this is approved legally), some still believe that this method may seem like a strategic move to negotiate the upcoming chip tariff with other countries, particularly with China.
This idea initially sparked investor confidence and market optimism that pushed Intel’s stock price to surge, albeit providing a mixed picture for other foreign stock markets such as Taiwan Semiconductor Manufacturing Company, LTD. (TSMC)
But why good or intel?
***Possibilities***
Intel could receive an immediate cash infusion or reduce the repayment obligation as the government converts part of the Intel in the Chip Act grants into equity, especially when Intel is currently under the impression of having some financial difficulties.
