The Federal Reserve raised interest rates on Wednesday by 0.25 percentage points to a range of 1.5% and 1.75%. The Fed also signaled that it would raise rates at least two more times this year and a further two to three times in 2019. This the 6th time since the financial crisis that rates have been raised. Officials are also more optimistic about the economy as they raised their median estimates for economic growth this year to 2.7%, up from 2.5% in December. They expect unemployment to fall to 3.8% this year and 3.6% in 2019.
Meanwhile, President Donald Trump announced a 25% tariff on up to $60 billion worth of annual imports from China. The new levies are on 128 different Chinese imports. This will be his first trade action directly targeting China and could lead to retaliation by China.
Beijing has already said it was planning tariffs on about $3 billion in imports, including a 15% tariff on US steel pipes, fresh fruit and wine, and a 25% tariff on pork and recycled aluminum. However, Bloomberg economists estimate that a global trade war could will have no winners and could erase around $470 billion off the world economy by 2020.
Facebook (NASDAQ: FB) has got into trouble as it was revealed that a British data consultant, Cambridge Analytica, had created psychological profiles on around 50 million Facebook users via a personality prediction app. This app was downloaded by 270,000 people but also accessed data of their friends without their consent. CEO Zuckerberg has since responded by admitting Facebook’s mistakes and that the social media company will step up to fix the problems surrounding data privacy.
Back home, Singapore’s non-oil exports unexpectedly declined by 5.9% from a year ago. Analysts had expected a growth of 4.8%, following strong growth in the previous four months. Analysts believe the timing of the Chinese New Year holidays were to blame for the month’s poor showing. Part of the blame was due to a decrease in electronics exports by 12.3%.
Finally, China’s parliament unanimously re-elected Xi Jinping as the country’s president. Wang Qishan, a key ally of the president, was chosen as vice president. Only one person voted against Wang out of the total 2,970 votes cast. The parliament also voted to amend the constitution to remove presidential term limits, opening the possibility of President Xi’s extended stay in power.
Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know--and we've laid them all out in The Motley Fool Singapore's new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge--simply click here now to claim your copy.
Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended Facebook. Motley Fool Singapore contributor Jeremy Chia doesn’t own shares in any companies mentioned.