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By Howard Schneider PALO ALTO (Reuters) – The Fed should not commit to further interest rate cuts until it is clear whether the Trump administration’s tariff policies lead to persistent inflation or a less serious, one-time adjustment in prices, St. Louis Fed President Alberto Musalem said on Friday. Musalem said he currently puts even odds on either of the two paths for inflation. In theory, tariffs should prompt a one-time price jump similar to the imposition of a tax; but coming off the heels of recent high inflation the effect could be longer-lasting, and may also be more persistent since…
By Ann Saphir and Howard Schneider Palo Alto, California (Reuters) – Kevin Warsh, an apparent frontrunner to be U.S. President Donald Trump’s pick to be the next chair of the Federal Reserve, on Friday suggested a possible pathway to the lower policy rates that Trump has repeatedly pressed the current Fed Chair Jerome Powell to deliver, and delivered a fresh dig at the Fed’s conduct of monetary policy. A large and often growing Fed balance sheet can work at cross-purposes with the Fed’s main policy lever of setting short-term borrowing rates, Warsh told a monetary policy panel at Stanford University’s…
By Howard Schneider and Ann Saphir PALO ALTO, California (Reuters) -The Federal Reserve needs more time to see how the economy responds to U.S. President Donald Trump’s tariff and other policies before figuring out the right response, Cleveland Federal Reserve President Beth Hammack said on Friday, noting that much of the administration’s sweeping agenda remains unclear. “I stand ready to move whenever we have clear and convincing evidence, but … given the overall breadth of the policies that have been discussed and put in place, I think there’s a real question about what those impacts are going to look like,…
(Reuters) – Oil prices were little changed early on Friday after rising more than 3% in the previous session, as trade tension between top oil consumers U.S. and China showed signs of easing and Britain announced a “breakthrough” trade deal with the United States. Brent crude rose 7 cents, or 0.1%, to $62.91 a barrel while U.S. West Texas Intermediate crude was up 7 cents, or 0.1%, at $59.98 a barrel as at 0121 GMT. On Thursday, Brent settled up 2.8% at $1.72 and WTI rose 3.2% to $1.84. U.S. Treasury Secretary Scott Bessent will meet China’s top economic official…
By Andrea Shalal and Steve Holland WASHINGTON (Reuters) -U.S. President Donald Trump renewed his criticism on Thursday of Federal Reserve Chair Jerome Powell, calling him a “fool” and complaining that the Fed is refusing to lower interest rates. Trump has been on a virtual war path against Powell in recent weeks, threatening to fire him — and then backing away from that threat. He has repeatedly lashed out at Powell in posts on his social media site, calling him “a major loser” in one post. Trump, speaking one day after the Fed, as financial markets had widely expected, kept its…
By Jonathan Stempel (Reuters) -Citigroup must face a revived lawsuit claiming it caused more than $1 billion of losses by orchestrating and concealing a vast fraud at the now-bankrupt Mexican oil and gas services company Oceanografia, a U.S. appeals court ruled on Thursday. A three-judge panel of the 11th U.S. Circuit Court of Appeals in Miami said 30 Oceanografia vendors, creditors and bondholders adequately alleged that Citigroup substantially aided the fraud, and a lower court judge erred in dismissing the nine-year-old case. Danielle Romero-Apsilos, a Citigroup spokeswoman, declined to comment. Juan Morillo, one of the plaintiffs’ lawyers, said his clients…
By Marc Jones LONDON (Reuters) – World shares inched higher on Thursday, buoyed by U.S. President Donald Trump’s promise of a first trade deal in his global tariff war – tipped to be Britain – while the dollar gained as markets pushed out the chance of near-term Fed rate cuts. Traders also got a widely expected quarter-point rate cut from the Bank of England while Sweden and Norway also hinted they could also cut theirs later in the year given the current global uncertainty. Europe’s main stock markets tested recent highs, led by a more than 1% rise from Germany’s…
By Lucy Craymer WELLINGTON (Reuters) -New Zealand’s employment grew at a soft pace in the first quarter with the jobless rate holding around 4-1/2-year highs and wage inflation moderating, reinforcing bets for more interest rate cuts later this month and throughout the year. The South Pacific nation crept out of a recession at the end of last year, but sluggish domestic demand and rising external risks from U.S. President Donald Trump’s global trade war remain a drag on economic growth. In an effort to shore up demand, the Reserve Bank of New Zealand has slashed the cash rate by 200…
(Reuters) – U.S. President Donald Trump’s tariffs are increasingly clogging up the wheels of a world economy which for decades were greased by predictable and relatively free trade. Big-name multinationals right down to niche e-commerce players last week cut sales targets, warned of job cuts and reviewed their business plans, while major economies revised down growth prospects amid bleak data read-outs. While financial markets are betting the U.S. and China will pull back from an all-out trade war and that Trump will cut deals to avert higher tariffs on others, the sheer uncertainty of where this ends has become a…
(Reuters) -The U.S. Federal Reserve’s incoming vice chair for supervision is seeking to review the confidential ratings for the health of the country’s biggest banks, the Wall Street Journal reported on Friday. If any adjustments were to be made to the supervisory ratings, which have gone through layers of evaluation at the central bank, some bank examiners would likely raise concerns, according to the report. The Fed is yet to release the new ratings for U.S. banks with over $100 billion or more in assets and intends to wait until the Senate confirms Michelle Bowman as the new top banking…