2025-08-14 20:09

Wholesale prices jump could show impact of tariffs Fed policymakers lean against half-percentage-point rate cut More jobs, inflation data to come before Fed's September 16-17 meeting Fed Chair Powell to speak on August 22 with latest economic outlook Aug 14 (Reuters) - A jump in wholesale prices is likely to bolster concerns among Federal Reserve policymakers that rising inflation remains a risk, intensifying debate over the rationale for an interest rate cut next month and leaving the tension between the U.S. central bank and the White House unresolved. The Producer Price Index increased 0.9% in July on a month-over-month basis, well above economists' expectations, a report from the Labor Department's Bureau of Labor Statistics showed on Thursday. Trade services inflation, a measure of retail and wholesale margins, rose 2%, the fastest pace in a couple of years and a possible signal of higher prices being passed along to consumers instead of absorbed through lower profits. Sign up here. Analysts said the increase could be a precursor of higher consumer prices, which to date have reflected a more limited impact from the Trump administration's higher tariffs than initially expected. The data virtually eliminated in the minds of investors the likelihood of a larger-than-normal half-percentage-point cut at the Fed's September 16-17 meeting, and left policymakers to decide how to justify and frame an expected quarter-percentage-point cut next month with inflation still well above the U.S. central bank's 2% target. Investors may get a taste of how Fed Chair Jerome Powell sees the situation next Friday, when he is due to speak at the annual Kansas City Fed's central banking conference in Jackson Hole, Wyoming. In July, Powell gave little steer at all toward a coming rate cut. Following the PPI report, analysts said they expected the Personal Consumption Expenditures price index excluding volatile food and energy costs, a statistic the Fed regards as an important guide for its inflation target, to have increased 2.9% on a year-over-year basis in July. The next PCE report will be released on August 29. Recent cracks in the labor market did cause a reassessment of the risks facing the economy, St. Louis Fed President Alberto Musalem said in a CNBC interview on Thursday, with slow growth threatening the job market and possibly warranting a cut if the weakness continues. But Musalem said with inflation perhaps nearing 3%, he needs further data before making a call on what to do in September, given the fact that the economy is still adapting to rising import taxes. "I expect ... most of the impact of tariffs on inflation to fade after two to three quarters ... But there is a reasonable probability that they could be more persistent," said Musalem, who is a voting member of the Fed's rate-setting committee this year. In comments to the National Association for Business Economics on Thursday, Richmond Fed President Thomas Barkin said it remained unclear whether the Fed's employment or inflation goals were more at risk right now. "High unemployment is, in fact, disinflationary. Or is inflation high enough or sustained enough that it's going to put inflation expectations at risk? And I think that's the trade-off you're trying to manage," Barkin said. The Fed will receive the August employment report and consumer price data for that month before its September meeting, releases that could prove pivotal to both a decision on cutting rates and to whether any reduction in borrowing costs is characterized as the start of a cutting cycle aimed at moving monetary policy to a "neutral" setting, or as an adjustment that may or may not be followed by further moves. Two Fed governors, Christopher Waller and Vice Chair for Supervision Michelle Bowman, dissented against the decision to hold rates steady at the Fed's policy meeting last month, favoring a quarter-percentage-point cut. Investors still consider a regular-sized rate cut of 25 basis points as a likely outcome next month, but the odds of a cut dropped from nearly a 100% certainty to about 90% after the release of the producer prices data. 'SERIES OF CUTS' Treasury Secretary Scott Bessent argued this week that a series of rate cuts could be warranted to move the Fed's benchmark policy rate from the current 4.25%-4.50% range, to around 3%, a level considered to neither boost nor discourage economic activity. "There is room for a series of cuts ... A model of a neutral rate is approximately 150 basis points lower," Bessent said on Fox Business' "Mornings with Maria" on Thursday. He added he was not giving advice to the Fed, whose judgments on rate policy are supposed to be made independently of White House influence, but simply noting his analysis. His comments, however, preceded the release of the new producer prices data that is likely to complicate the Fed's own read of the situation. Musalem, while not prejudging the outcome of the September meeting, said he felt a larger half-percentage-point cut, raised as a possibility by Bessent earlier this week, was "unsupported" by current economic conditions, a view shared by San Francisco Fed President Mary Daly in an interview with the Wall Street Journal. A rise in services inflation that was evident underneath otherwise tame consumer price data released on Tuesday may also worry policymakers who were counting on weaker services prices to offset any tariff-related jump in the cost of imported goods. Chicago Fed President Austan Goolsbee, also a voting policymaker this year, said on Wednesday he was open to a cut in September despite ongoing concerns about inflation, but would be concerned if prices for things outside of tariffed goods begin to accelerate. https://www.reuters.com/business/hot-wholesale-prices-data-puts-wrinkle-feds-rate-cut-roadmap-2025-08-14/

2025-08-14 20:06

SAO PAULO, Aug 14 (Reuters) - Brazil Potash Corp (GRO.A) , opens new tab is in talks with banks and other lenders to secure between $1.7 billion and $1.8 billion in debt to fund its planned potash mine in Brazil's Amazonas state, Chief Executive Matt Simpson said in an interview. The underground mine, around 100 miles from Manaus, the capital of Amazonas, will supply 2.4 million short tons of potash per year, equivalent to 17% of Brazil's current potash needs once production begins near 2030, Simpson told Reuters this week. Sign up here. The project would be key for the country, a global agricultural powerhouse which imports almost all of its potash fertilizer, Simpson said. Brazil Potash has raised around $280 million to fund construction of the potash project, which is expected to cost around $2.5 billion, Simpson added. "We're speaking to a number of different banks," Simpson said. "We're also speaking to some export credit agencies and some international financial institutions." Possible lenders include Brazilian and international entities, he added. Project developers are taking steps to prevent damage to the environment in the Amazon region, Simpson said, noting that water used in potash production will largely be recycled. Brazil Potash has already secured an agreement with agriculture company Amaggi, which committed to purchasing 550,000 tons of the mine's planned production, Simpson said. Amaggi did not immediately respond to a request for comment. Brazil Potash has a memorandum of understanding for another million tons with another company and is in talks with a third potential client, Simpson said. "Over the course of the next couple of months, we're aiming to have about 2.2 million of our 2.4 million (short tons) under contracts for at least 10 years in duration," he said. https://www.reuters.com/markets/commodities/brazil-potash-seeks-up-18-billion-build-amazon-mine-2025-08-14/

2025-08-14 19:26

Trump-Putin meeting in Alaska could impact Russian oil exports Analysts skeptical of significant oil supply disruption from US-Russia talks US producer prices jumped last month, limiting possibility of big Fed rate cut NEW YORK, Aug 14 (Reuters) - Oil prices climbed about 2% to a one-week high on Thursday after U.S. President Donald Trump warned of "severe consequences" if his talks with Russian President Vladimir Putinon Ukraine fail, and on optimism that a likely U.S. interest rate cut next month could spur oil demand. Central banks, like the U.S. Federal Reserve, use interest rates to control inflation. Lower rates reduce consumer borrowing costs and can boost economic growth and demand for oil. Sign up here. Brent crude futures rose $1.21, or 1.8%, to settle at $66.84 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.31, or 2.1%, to settle at $63.96. Those price gains pushed both crude benchmarks out of technically oversold territory for the first time in three days, and led Brent to its highest close since August 6. On Tuesday, Brent closed at its lowest price since June 5 and WTI closed at its lowest price since June 2 due in part to bearish inventory and supply data from the U.S. Energy Information Administration and the International Energy Agency. said on Thursday he thought Putin was ready to make a deal on ending his war in Ukraine after the Russian president floated the prospect of a on the eve of their summit in Alaska. But on Wednesday, Trump threatened "severe consequences" if Putin does not agree to peace in Ukraine, without elaborating. Trump has warned of economic sanctions if the meeting on Friday proves fruitless. Russia was the second-biggest producer of crude in 2024 behind the U.S., so any agreement that could ease sanctions on Moscow would likely boost the amount of Russian oil available for export to global markets. Trump has threatened to enact secondary tariffs on buyers of Russian crude, primarily China and India, if Russia continues its war in Ukraine. "The uncertainty of U.S.-Russia peace talks continues to add a bullish risk premium given Russian oil buyers could face more economic pressure," Rystad Energy said in a client note. Some analysts, however, remained skeptical that Trump would take action that could significantly disrupt oil supplies. FED RATE CUT Expectations that the Fed will cut rates in September also propped up oil prices. Traders mostly believe a cut will happen next month after U.S. consumer prices increased at a moderate pace in July. U.S. Treasury Secretary Scott Bessent said he thought an aggressive half-percentage-point cut was possible given recent weak employment numbers. But a jump in is likely to bolster concerns among Fed policymakers that rising inflation remains a risk, intensifying debate over the rationale for an rate cut next month and leaving the tension between the U.S. central bank and the White House unresolved. In Europe, Norwegian oil and gas investments are expected to peak this year and start declining in 2026 as major projects are completed, a statistics office survey of industry players showed on Thursday. Norway produces about 2% of global oil. It became Europe's largest supplier of pipeline gas after Russia's invasion of Ukraine in February 2022. https://www.reuters.com/business/energy/oil-prices-climb-2-1-week-high-fed-rate-cut-trump-putin-talks-loom-2025-08-14/

2025-08-14 19:25

US producer prices accelerate in July Dollar rises across the board Traders stick to bets for September interest rate cut by Fed Yen sees brief lift from Bessent comment BOJ needs to raise rates again soon Bitcoin eases after hitting fresh high NEW YORK, Aug 14 (Reuters) - The U.S. dollar rose across the board on Thursday as data showed U.S. producer prices increased more than expected in July amid a surge in the costs of services and goods, suggesting a broader pickup in inflation in the months ahead. The hot measure of inflation at the wholesale level follows the release on Tuesday of a better than feared rise in consumer prices in July, which emboldened traders to boost bets on interest rate cuts from the Federal Reserve in coming months. Sign up here. While Thursday's data did not upset the case for a September rate cut, it did raise worries that tariffs could still stir up inflation in coming months and change the course of interest rate cuts for the rest of the year. It also hurt the case for the Fed to resume cutting rates with a 50 basis point cut in September, something Treasury Secretary Scott Bessent suggested in an interview on Wednesday. "I think that was never particularly likely, but presumably this PPI report quashes that," Matt Weller, global head of market research at StoneX. A half-point rate cut at the Fed's September meeting is not warranted by the current state of the economy, with the country near full employment, inflation running above the Fed's 2% target, and businesses still in the early stage of adapting to higher import taxes, St. Louis Fed President Alberto Musalem said on Thursday. The inflation data does raise questions about whether the Fed can deliver an aggressive pace of cuts for the rest of the year, StoneX's Weller he said. "Some people were saying that we could see three consecutive 25 basis point rate cuts ... but if anything approaching this level of inflation is in place it seems like we might be looking at more of a max of two interest rate cuts and even that might be questionable," Weller said. While financial markets have priced in an interest rate cut from the Federal Reserve next month, rising services inflation and the expectation tariffs could still significantly boost goods prices left some economists doubtful of an aggressive resumption in policy easing in the absence of further labor market deterioration. Traders still see a Fed rate cut on September 17 as a near certainty, according to LSEG data. The dollar index , measuring the currency against a basket of peers, was 0.5% higher at 98.25. The euro was 0.5% weaker at $1.16413 while the British pound eased 0.3% to $1.35325. Still, analysts warned against expecting a sustained rebound in the buck. "The market is very much likely to remain ‘all in’ on the idea of a September cut, at least until we hear from Powell at Jackson Hole next week," Michael Brown, market analyst at online broker Pepperstone in London, said, referring to the Fed's Jackson Hole Economic Symposium later this month. The dollar, which fell against the yen earlier in the session after Bessent suggested the Bank of Japan needs to raise rates again soon, reversed course to trade 0.3% higher at 147.87 yen. The stronger greenback weighed on the Australian dollar even as upbeat jobs data calmed concerns about a downturn in the labor market and lessened the need for another rate cut in the very near term. The Aussie was last down 0.8% to $0.6495. . Meanwhile, bitcoin, which earlier hit its first record peak since July 14, pushing as high as $124,480.82, sold off and was last down nearly 4% at around $118,157. Bitcoin was already underpinned by increased institutional money flows this year in the wake of a spate of regulatory changes spearheaded by Trump, who has billed himself the "cryptocurrency president." In the latest move, an executive order last week paved the way to allow crypto assets in 401(k) retirement accounts. "Corporate treasuries like MicroStrategy and Block Inc. continue to buy bitcoin," said IG analyst Tony Sycamore. https://www.reuters.com/world/africa/dollar-up-us-producer-prices-surge-july-2025-08-14/

2025-08-14 17:54

Law passed by Congress increased companies' interest in issuing stablecoins Citi could be custodian of Treasuries and cash backing stablecoins Bank also considers stablecoin payments and conversion services to dollars NEW YORK, Aug 14 (Reuters) - Citigroup (C.N) , opens new tab is exploring providing stablecoin custody and other services, a top executive told Reuters, in a further sign sweeping policy changes in Washington are spurring major financial firms to expand into the cryptocurrency business. The U.S. bank is among a handful of traditional institutions, including Fiserv and Bank of America, considering pushing into stablecoins after Congress passed a law paving the way for the crypto tokens to become widely used for payments, settlement, and other services. Stablecoins are cryptocurrencies pegged to a fiat currency or another asset, commonly the U.S. dollar. Sign up here. That law requires stablecoin issuers to hold safe assets such as U.S. Treasuries or cash to back the digital coins, creating opportunities for traditional custody banks to provide safekeeping and administration of the assets. "Providing custody services for those high-quality assets backing stablecoins is the first option we are looking at," Biswarup Chatterjee, global head of partnerships and innovation for Citigroup's services division, said in an interview. Citi's services business, which includes treasury, cash management, payments, and other services to large companies, remains a core unit for the bank, which has been undergoing a major restructuring. A McKinsey study , opens new tab estimates about $250 billion in stablecoins have been issued so far, but are mainly used to settle cryptocurrency trades. While Citigroup said last month it was considering issuing its own stablecoin, the bank has not previously discussed its broader digital asset plans. Citi is also exploring custody services for digital assets that back crypto-related investment products. For example, many asset managers have launched ETFs tracking the spot price of bitcoin since the Securities and Exchange Commission authorized such products last year. The largest bitcoin ETF, BlackRock's iShares Bitcoin Trust (IBIT.O) , opens new tab, has around $90 billion in market capitalization. "There needs to be custody of the equivalent amount of digital currency to support these ETFs," Chatterjee said. Currently, crypto exchange Coinbase (COIN.O) , opens new tab dominates that business. In a statement, a Coinbase spokesperson said the company serves as the custodian for more than 80% of issuers of crypto ETFs. Citi is also exploring using stablecoins to speed up payments, which in the traditional banking system typically take several days or longer. Currently, Citi offers "tokenized" U.S. dollar payments that use a blockchain network to transfer dollars between accounts in New York, London, and Hong Kong 24 hours a day. It is developing services to allow clients to send stablecoins between accounts or to convert them to dollars to make instant payments, and is talking to clients about the use cases, Chatterjee added. Once wary of allowing traditional financial firms to expand into the often-volatile crypto sector, banking and securities regulators under U.S. President Donald Trump's crypto-friendly administration are taking a more relaxed stance on the sector. Still, Citi and other firms would have to comply with current regulations, including money laundering and currency controls in some countries for international transfers. Chatterjee said the custody of crypto assets needs to ensure these assets, prior to being acquired, were used for legitimate purposes, and also strengthen cyber and operational security for safekeeping and theft prevention. The issuance of a stablecoin by the bank is also under consideration, Chatterjee added. https://www.reuters.com/business/finance/citigroup-considers-custody-payment-services-stablecoins-crypto-etfs-2025-08-14/

2025-08-14 17:49

NEW YORK, Aug 14 (Reuters) - Shares of Miami International Holdings (MIAX.N) , opens new tab jumped 38% from their initial public offering price, valuing the exchange operator at about $2.5 billion on its debut in New York on Thursday. The stock market launch of MIAX, as the company is referred to, marks the first listing of a major U.S. financial exchange in 15 years, as only a handful of exchange operators have gone public since the 2000s. Sign up here. Shares of MIAX, which has been attempting to go public since 2022 when it first filed confidentially for its flotation, opened for trading at $31.65 apiece, above the $23 IPO price. "We thought now is a good time (for us to go public) because of the macro-economic climate. I also thought in mid-August there wouldn't be as much going on in the capital markets with respect to IPOs, and we could get the attention," said Thomas Gallagher, chairman and CEO of MIAX, in an interview with Reuters. The Princeton, New Jersey-based company sold 15 million shares above the marketed range of $19 to $21 apiece to raise $345 million on Wednesday, making it one of the biggest share sales of a U.S. bourse operator. CME Group (CME.O) , opens new tab was the first U.S. exchange to go public in 2002, while Cboe Global (CBOE.Z) , opens new tab listed in 2010. Exchanges have also thrived this year as heightened market volatility fueled record trading volumes and boosted profits. "It's a niche area, but it's one investors are comfortable with. MIAX is clearly riding some multi-year tailwinds in the options space," said Matt Kennedy, senior strategist at IPO-focused research and ETFs provider Renaissance Capital. OPTIONS FOCUS MIAX, which was co-founded by Gallagher, was launched in 2007 after a wave of consolidation amongst equity and options exchanges. MIAX operates nine securities and derivatives exchanges and the majority of its revenues are generated from options trading. The U.S. options market has witnessed explosive growth since the Covid-19 pandemic and the meme-stock frenzy of 2021. The company launched its first options exchange in 2012 and has gained market share from rivals over the past decade. In the first half of 2025, it had a 16% market share in the U.S. options industry, behind only the NYSE, Nasdaq, and Cboe, according to the Options Clearing Corporation. While it currently does not have any products involving crypto futures, MIAX is open to opportunities to expand its offerings to potentially cash in on the demand for crypto. "If a crypto partner comes to me and says, we'd like to do a joint venture to bring a crypto offering, either to your futures exchange or some type of an option on some crypto index, we're open for business," Gallagher said. MIAX counts the likes of private equity firm Warburg Pincus and market-making giant Citadel Securities among its prominent investors. Citadel and other market-making firms like Susquehanna Securities, which are also MIAX's biggest customers, currently hold a roughly 20% stake in the company. MIAX's debut comes a day after a blowout launch for crypto exchange Bullish, whose shares surged 84% after it started trading on Wednesday. JPMorgan Chase, Morgan Stanley, and Piper Sandler were the lead underwriters for MIAX's offering. https://www.reuters.com/markets/europe/exchange-operator-miami-international-soars-38-debut-after-345-million-ipo-2025-08-14/