China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Fed's Fisher: Fed must be ready to act on inflation (Reuters)
2008.08.1914 minutes ago
ASPEN, Colo. (Reuters) - The U.S. Federal Reserve must be ready to take action if slowing growth fails to curb inflation stemming from higher food and energy prices, one of its top policy-makers said on Monday.
"Until we have a clear sense of what will prevail, monetary policy makers must remain poised to act if slowing growth fails to contain inflationary pressures," Dallas Federal Reserve Bank President Richard Fisher said in prepared remarks. A text of his speech was made available to the media.
Fisher is a voting member of the Fed's interest-rate setting committee this year and has dissented at every meeting so far in favor either of higher rates, or of less aggressive easing.
"Unless the python that is the U.S. economy can quickly pass the recent burst of cost-push pressures, we risk a reinforcing spreading of inflationary impulses and expectations," he told the Progress and Freedom Foundation.
"Should this happen and the Fed were to fail to address it, we would run the risk of losing the public's confidence in our ability to constrain inflation," he said.
Earlier on Tuesday, the Labor Department report that U.S. wholesale prices rose sharply. Producer prices in July were up 9.8 percent from a year ago, the biggest increase since 1981, while prices excluding food and energy were up 3.5 percent, the biggest rise since 1991.
The Fed halted its aggressive rate cutting campaign in June after slashing its benchmark overnight fed funds rate 3.25 percentage points to 2 percent since mid-September to shield the economy from a housing crisis and credit crunch.
Fisher said the Fed had "done its job on the growth front," although he warned the economy would slow to a snail's pace in the second half, if not grind completely to a halt, before a recovery unfolds in 2009.
He also acknowledged that current market conditions remained very fragile.
"The correction in the housing market has yet to find its bottom. Credit markets remain tempestuous," he said, subtly reinforcing market expectations that the Fed will keep rates on hold in the months ahead.
(Reporting by Alister Bull; editing by Neil Stempleman)
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