Fed Official Waller: Rate Hikes May Be Necessary to Tame Core Inflation

Federal Reserve official Christopher Waller stated that core inflation (excluding energy and food prices) has not yet reached the desired stability level, suggesting that rate hikes may be necessary. He emphasized an open gap of 3.5% in sectors where inflation is spreading, highlighting the need for measures against inflationary pressures.

Inflation's Deep Impact on Chip and Supply Chains

■Companies like TSMC are experiencing a 12% price increase due to rising energy and logistics costs.

■Suppliers such as ASML face currency devaluation risks; Euro/Dollar fluctuations could lead to a $500 billion drop in market capitalization.

■The US-China rare earth elements conflict is driving supply chain shortages, triggering short-term price hikes in semiconductor materials.

Market Expectations and Investment Strategies

■Investors anticipate additional rate hikes, causing liquidity withdrawal of 15% in tech stocks like Nvidia.

■US Treasury yields show a 2.5% upward trend, while precious metals and base metals see increased demand in commodity markets.

Markets typically pivot toward strategic positioning after such announcements, avoiding inflationary shocks. If the Fed's policy remains non-disruptive, it may mitigate currency depreciation, but could force acceptance of supply chain cost escalations. The semiconductor industry aims for 8-10% growth in 2024, but rate hikes might reshape cost structures.