Financial and Economic Brief - March 20, 2018by © Liberty Publishing, Inc.
Rate Hike Strategy
Jerome Powell, chairman of the Federal Reserve, heads toward his first interest rate increase this week. He may make some changes to reflect the shifting economic conditions, but is as committed to “gradual, moderate rate increases” as his predecessor Janet Yellen sources say. Powell’s focus will be to maintain one of the longest U.S. recoveries for as long as possible. This might mean a policy-tightening cycle that lasts longer, with rates going higher than earlier thought. But a stronger economy does not necessarily mean the Fed is abandoning its “balanced assessment of risks”. Rather, it can give Powell some “wiggle room”.
Retail Companies against Tariffs
The Trump administration is preparing tariffs against Chinese information technology, telecommunications and consumer products to force changes in Beijing’s intellectual property and investment practices. It is estimated that more than $60 billion in tariffs could be imposed on goods ranging from electronics to apparel, footwear and toys. Several large U.S. retail companies sent President Donald Trump a letter urging him not to impose the tariffs. Sandy Kennedy, president of the Retail Industry Leaders Association, argued that tariffs would eliminate any benefit the recent tax overhaul provided the economy.
L’Oreal Purchases ModiFace
L'Oreal has purchased ModiFace, a Canadian firm that specializes in artificial intelligence and augmented reality technology. L’Oreal is hoping ModiFace will bolster its previous work on virtual beauty products. ModiFace's engineers, researchers and scientists are expected to help L’Oreal develop apps and in-store services. The two companies are working on technology that can scan a human face and provide suggestions for skin-care products based on facial wrinkles, pores, hydration levels, and pigmentation. “We really want to invent the future of the beauty experience to help our consumers discover, try and buy... the best products and brands for them,” the chief digital officer at L’Oreal said.