The Fed and Semiconductors May Come Into Greater Focus
May 6, 2025
Mott Capital Management
It was a boring day, with the market falling to start and basically trading sideways. Tomorrow, of course, will be the FOMC meeting, and I do not expect anything material to come from it. There is no dot plot, and I don’t think enough has changed from the last time Powell spoke that his communication will be all that different.
Tomorrow is also the day Section 232 on semiconductors closes the public comment period. It will be interesting to see if we start hearing more about tariffs on semiconductors and technology in general following this. The media at least seems to have forgotten about chip tariffs and seems to think they have been excluded. I always understood that semiconductors and related technology would be separate from reciprocal tariffs. We may find out soon?!? I do not know.
The recent move in the Taiwan dollar would suggest otherwise. The Taiwan dollar surged by more than 9% on Friday and Monday. It weakened some today, but not by much. It is quoted like the USDJPY, and so when its value declines, it means it is strengthening.
We have seen a similar type of movement in the Korean won. I’m not entirely sure what these big moves have been about, but the timing of the moves, the type of exports both Korea and Taiwan are known for (chips), and the closing of the public comment period on section 232 seem to be odd, to say the least.
I guess we will find out…
Mike
