A scholar says Taiwan should cautiously prepare for the US Federal Reserve’s rate hike later this year.
The scholar is Gordon Sun, an official with the Taipei-based Taiwan Institute for Economic Research. His comments on Sunday came after Federal Research Chair Janet Yellen said that the central bank is on track to raise interest rates this year.
Sun said the Fed is likely to raise its interest rates in the third or the fourth quarter. He also said that once the rate hike cycle begins, Taiwan’s equity and bond markets will both fall. However, he said that the impact may be limited because the financial market is already expecting such a rate hike.
Meanwhile, Sun said a stronger US dollar will help with Taiwan’s exports. He also said there are some unfavorable factors in the global economy, so Taiwan has to remain cautious in the second half of the year.