2025-06-08 11:52

ASTANA, June 8 (Reuters) - Kazakhstan's President Kassym-Jomart Tokayev on Sunday replaced two ministers in his government, including the transport minister, who he had previously criticized for delays in infrastructure modernisation. He fired Defence Minister Ruslan Zhaksylykov and replaced him with Zhaksylykov's deputy and Air Defence Forces chief Dauren Kosanov, according to decrees published on the president's site. Sign up here. Tokayev met Kosanov on Sunday and gave him several instructions, including strengthening the army's combat readiness, expanding the capabilities of the Special Operations Forces, and modernising the military's infrastructure. Zhaksylykov, previously deputy interior minister and head of the national guard, was appointed defence minister after civil unrest in January 2022 triggered by the removal of a price cap on fuel. Authorities were forced to call in troops from a Russian-led alliance of former Soviet states to quell what became a broad protest against corruption and economic hardship. Tokayev also sacked transport minister Marat Karabayev who he had reprimanded in May for problems with transport and logistics. It is not clear who will replace Karabayev. The president did not reveal the reasons for the reshuffle. https://www.reuters.com/world/asia-pacific/kazakhstan-president-replaces-ministers-defence-transport-2025-06-08/

2025-06-08 09:46

FRANKFURT, June 8 (Reuters) - The European Central Bank can take its time on interest rates with monetary policy now set at a neutral level that is no longer restrictive, ECB policymaker Joachim Nagel said on German radio on Sunday. The ECB cut interest rates on Thursday for the eighth time in a year but signalled at least a policy pause next month after inflation returned to its 2% target. Sign up here. Nagel, who is also the president of Germany's central bank, said rates are now at a neutral level - central-banker language to describe policy that neither expands nor brakes the economy. "We are no longer restrictive. I believe that we can now take the time to look at the situation first. We now have maximum flexibility at this interest rate level," Nagel said in a live interview on Deutschlandfunk radio. The ECB has lowered borrowing costs eight times, or by 2 percentage points since last June, seeking to prop up a euro zone economy that was struggling even before erratic U.S. economic and trade policies dealt it further blows. https://www.reuters.com/business/finance/ecb-can-take-time-policy-policymaker-nagel-says-2025-06-08/

2025-06-08 08:36

Escriva is 'very comfortable' with gradual 25 bps cuts Sees less confidence in U.S. dollar due to uncertainty Bank of Spain to revise down Spanish GDP outlook for 2025 MADRID, June 8 (Reuters) - The path of monetary policy easing in the euro zone could require further adjustments if the current macroeconomic and inflation outlooks are confirmed, ECB policymaker Jose Luis Escriva said. Last week, the ECB cut interest rates and hinted at a pause after inflation in the euro zone returned to its 2% target. Sign up here. Escriva, who is also Bank of Spain Governor, said in an interview to newspaper El Pais on Sunday that he "was very comfortable" with the current, gradual approach of successive 25-basis-point rate cuts. "Our central scenario – GDP growth of around 1%, inflation of 2% – could require some fine-tuning if it is confirmed," Escriva. The ECB has cut rates 2 percentage points since last June, to prop up a euro zone economy also hit by erratic U.S. economic and trade policies. Escriva said confidence in the dollar and U.S. assets had decreased since U.S. President Donald Trump took office and that since April, the dollar had not been a "safe haven" and its dominance as a global reserve currency appeared to have peaked. He also said the Bank of Spain was expected to revise downwards on Tuesday the forecast for Spanish economic growth by a few decimal points from the current 2.7% for 2025. https://www.reuters.com/business/finance/ecbs-escriva-sees-scope-minor-monetary-policy-easing-2025-06-08/

2025-06-08 06:00

Vujcic tells Reuters policy is not 'precision surgery' Croatia central banker sees higher bar for QE after past experience Inflation risks balanced but 'complete uncertainty' on trade tensions DUBROVNIK, Croatia, June 8 (Reuters) - The European Central Bank should not "overreact" to euro-zone inflation edging below its 2% target as there are good reasons to believe it will come back up, ECB policymaker Boris Vujcic told Reuters. The ECB cut interest rates on Thursday for the eighth time in a year but signalled at least a policy pause next month, despite projecting inflation at just 1.6% next year. Inflation in the 20 countries that share the euro was 1.9% in May, according to a flash reading published last week. Sign up here. Vujcic, who is also Croatia's central bank governor, said price growth was likely to bounce back later and that monetary policy should not try to do "precision surgery" on small fluctuations from its goal. "A few tens of basis points' deviation on either side of the target is not a problem," Vujcic said in an interview on Saturday in Dubrovnik. "Because you will always have small deviations. If you consider them as a problem, then you will overreact. This is not precision surgery." Vujcic said it was reasonable to expect inflation to edge back up as energy prices find a bottom and the economy accelerates. Euro strength is also unlikely to have second-round effects on prices unless it lasts several quarters, Vujcic said. Some ECB policymakers, especially Portugal's central bank governor Mario Centeno, worry that euro-zone inflation may slow too much. Vujcic said he sees the risks surrounding the inflation outlook as "pretty balanced" but cautioned there was "complete uncertainty" surrounding global trade tensions with U.S. President Donald Trump's administration. ECB STRATEGY REVIEW Vujcic recalled advice he received as a young deputy governor from then-Federal Reserve Chair Alan Greenspan: a high rate of inflation was more dangerous than a low one. Greenspan cited two decades of relatively benign deflation in the late 19th century, which was partly due to improvements in productivity, Vujcic said. "Nobody cared about low inflation because of the productivity growth," he said. "You have a monetary policy problem to bring it up. Yes, but why would you insist so much if you don't have a problem in the economy?" The ECB is reviewing its long-term strategy, including the role of massive bond purchases, or quantitative easing, in reviving inflation when it is too low. The ECB injected some 7 trillion euros ($8 trillion) of liquidity into the banking system through QE and other tools over the past decade. These schemes were blamed for inflating bubbles in real estate and setting up the central bank for sizeable losses. "The next time around, people will take the lessons from the previous episode, and I think that the bar for QE would be higher," Vujcic said. He said QE could help stabilise dysfunctional markets - such as during the 2008 financial crisis and the COVID-19 pandemic - but if used "for years and years to try and bring inflation up, its marginal efficiency declines". Such calls for self-criticism are shared by some policymakers in the ECB's hawkish camp. But sources told Reuters they were unlikely to feature in the ECB's new strategy document, to be published this summer. ($1 = 0.8777 euros) https://www.reuters.com/business/finance/ecb-should-not-overreact-if-inflation-edges-below-2-vujcic-says-2025-06-08/

2025-06-07 18:18

Trump voices no desire to repair relationship with Musk Musk deleted some social media posts hostile to Trump Musk was huge campaign donor to Trump, other Republicans BEDMINSTER, New Jersey, June 7 (Reuters) - Donald Trump said on Saturday his relationship with his billionaire donor Elon Musk is over and warned there would be "serious consequences" if Musk funds U.S. Democrats running against Republicans who vote for the president's sweeping tax and spending bill. In a telephone interview with NBC News, Trump declined to say what those consequences would be, and went on to add that he had not had discussions about whether to investigate Musk. Sign up here. Asked if he thought his relationship with the Tesla (TSLA.O) , opens new tab and SpaceX CEO was over, Trump said, "I would assume so, yeah." "No," Trump told NBC when asked if he had any desire to repair his relationship with Musk. "I have no intention of speaking to him," Trump said. However, Trump said he had not thought about terminating U.S. government contracts with Musk's StarLink satellite internet or SpaceX rocket launch companies. Musk and Trump began exchanging insults this week, as Musk denounced Trump's bill as a "disgusting abomination." Musk's opposition to the measure complicated efforts to pass the legislation in Congress, where Republicans hold only slim majorities in the House of Representatives and Senate. The bill narrowly passed the House last month and is now before the Senate, where Trump's fellow Republicans are considering making changes. Nonpartisan analysts estimate the measure would add $2.4 trillion to the $36.2 trillion U.S. debt over 10 years, which worries many lawmakers, including some Republicans who are fiscal hawks. Musk also declared it was time for a new political party in the United States "to represent the 80% in the middle!" Trump said on Saturday he is confident the bill would get passed by the U.S. July 4 Independence Day holiday. "In fact, yeah, people that were, were going to vote for it are now enthusiastically going to vote for it, and we expect it to pass," Trump told NBC. Republicans have strongly backed Trump's initiatives since he began his second term as president on January 20. While some Republican lawmakers have made comments to the news media expressing concern about some of Trump's choices, they have yet to vote down any of his policies or nominations. DELETED MUSK POSTS Musk has deleted some social media posts critical of Trump, including one that signaled support for impeaching the president, appearing to seek a de-escalation of their public feud, which exploded on Thursday. During his first term as president, the House, then controlled by Democrats, twice voted to impeach Trump but the Senate both times acquitted him. The White House and Musk did not immediately respond to requests for comment on Saturday on the deleted posts. People who have spoken to Musk said his anger has begun to recede and they thought he would want to repair his relationship with Trump. One of the X posts that Musk appeared to have deleted was a response to another user posting: "President vs Elon. Who wins? My money's on Elon. Trump should be impeached and (Vice President) JD Vance should replace him." Musk had written "yes." On Theo Von's "This Past Weekend" podcast - recorded on Thursday as the feud between Trump and Musk unfolded and released on Saturday - Vance called Musk's criticism of Trump a "huge mistake." "I'm always going to be loyal to the president, and I hope that eventually Elon kind of comes back into the fold. Maybe that's not possible now because he's gone so nuclear. But I hope it is," said Vance, describing Musk as an "incredible entrepreneur." Trump is due to attend an Ultimate Fighting Championship fight card on Saturday in New Jersey. Since his second election win, he has attended two previous UFC mixed martial arts fight cards with Musk. Musk is not expected to attend on Saturday. Musk, the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign, spending nearly $300 million in last year's U.S. elections and taking credit for Republicans retaining a majority of seats in the House and retaking a majority in the Senate. Trump named Musk to head an effort to downsize the federal workforce and slash spending, lauding him at the White House only about a week ago for his work as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal budget. https://www.reuters.com/business/autos-transportation/trump-says-musk-will-face-very-serious-consequences-if-he-funds-democratic-2025-06-07/

2025-06-07 14:41

Schnabel hails 'progress' taming inflation Vujcic says ECB 'nearly done' with cuts BoE's Greene sees decoupling from Fed DUBROVNIK, Croatia, June 7 (Reuters) - The European Central Bank has made "great progress" in taming inflation but it should watch out for fresh price hikes caused by U.S. tariffs, ECB policymaker Isabel Schnabel said on Saturday. The ECB cut interest rates on Thursday for the eighth time in the past year and signalled at least a policy pause next month as it waits for the growth and inflation outlook to become clearer. Sign up here. Schnabel, the most prominent voice in the hawkish ECB camp that favours higher interest rates, celebrated inflation returning to the bank's 2% target. "I think we've made great progress, and as you know, our most recent inflation number was even below 2%," Schnabel told a conference in Dubrovnik. "Of course, that was to a very large extent driven by energy, but we do see that also the more persistent components are coming down and that is that is very, very good news." Croatian central bank governor and fellow hawk Boris Vujcic said the ECB was "nearly done" cutting rates provided that inflation settles at 2% as expected. But with the ECB now projecting inflation at 1.6% next year, other ECB policymakers, and especially Portugal's central bank governor Mario Centeno, are even worrying it may slow down too much. Schnabel said the ECB should rather switch its focus on possible, new "shocks", such as a global trade war waged by U.S. President Donald Trump's administration against its trading partners. She cited academic research showing that a 1% increase in producer prices around the world would result in a 0.2% increase, on average, in domestic producer prices in major economies. "Even in the absence of retaliation, the tariffs would be expected to be inflationary and even more so if there is retaliation," she said. As an example, Schnabel cited China's decision to restrict its exports of rare earths, which is forcing automakers and their suppliers to shut down production of certain models. China said on Saturday it was willing to accelerate the examination and approval of rare earth exports to European Union firms. Schnabel also cited ECB research showing that the effect of so-called trade diversion -Chinese producers shut out of the United States flooding European markets with their goods - was small. "If the effects were not small, you can be sure that there would be counteracting measures coming from the European Commission," Schnabel said. She argued all this suggested trade tensions would affect all economies, limiting the scope for the ECB's and U.S. Federal Reserve's monetary policies to diverge. "I expect this trade conflict to play out as a global shock that's working through both lower demand and supply," she said at the conference hosted by the Croatian central bank. "We can discuss which of the two effects on inflation is larger because that determines the net effect. But in any case, I would not expect a sustained decoupling (between the ECB and the Fed)," she said. Speaking on the same panel, Bank of England policymaker Megan Greene stuck a different tone, saying trade fragmentation should help bring down inflation in Britain, giving the BoE an "opportunity for monetary policy divergence going forward". https://www.reuters.com/business/finance/ecb-should-watch-out-price-hikes-us-tariffs-schnabel-says-2025-06-07/