2025-10-15 18:25
WASHINGTON, Oct 15 (Reuters) - Renewed U.S.-China trade tensions pose a "material" downside risk to the economic outlook, making it more important that the U.S. central bank cut its benchmark interest rate, Federal Reserve Governor Stephen Miran said on Wednesday. "We have to recognize that there is some difference now versus where we thought things were a week ago," before China announced new restrictions on the export of rare earth minerals critical to high-end manufacturing, Miran said at the CNBC "Invest in America Forum" in Washington. Sign up here. "There's now more downside risk than there was a week ago, and it is incumbent upon us as policymakers to recognize that should get reflected in policy ... It becomes even more urgent that we get to a more neutral place in policy quickly." He amplified those comments later at a research forum organized by Nomura, saying that if the U.S. and China follow through with threatened actions in coming weeks, "you see the risks of some material economic downside." President Donald Trump responded to China's rare earths announcement with threats to raise the tariff on Chinese imports to 100%, reviving a trade war between global economic giants that had threatened to deal a deep blow to the global economy last spring - a threat since avoided as the tariffs were dialed back and the two sides continued to negotiate. Beijing's announcement that it would cut off supplies of minerals critical to high-tech consumer and defense products makes it "important for us to consider the ways that the risks have changed in the last few days," Miran said. Treasury Secretary Scott Bessent, in remarks at the same forum, said the U.S. and China were continuing to talk. The Fed cut rates by a quarter of a percentage point last month and is expected to do so again at its October 28-29 meeting, which would push its policy rate to the 3.75%-4.00% range. Miran, on leave as the head of the White House's Council of Economic Advisers, argued for a larger half-percentage-point cut at the Fed's meeting last month, and said his outlook remains for lower inflation in coming months. He reiterated that he feels current U.S. monetary policy is too restrictive. "I'm less concerned about upside inflation in the near future, which then gives us the flexibility and the freedom" to cut rates faster, Miran said. https://www.reuters.com/world/china/us-china-trade-tensions-pose-new-risk-growth-outlook-feds-miran-tells-cnbc-2025-10-15/
2025-10-15 18:17
RIO DE JANEIRO, Oct 15 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Wednesday that Brazil and the U.S. will hold negotiation talks on tariffs on Thursday. Lula's remarks at an event in Rio de Janeiro followed a call between him and U.S. President Donald Trump last week in which Trump designated Secretary of State Marco Rubio to continue tariff negotiations with Brazilian officials. Sign up here. Brazilian Foreign Minister Mauro Vieira and Rubio agreed on a meeting last week. Vieira and Brazilian technicians are in Washington preparing for Thursday's meeting, a source familiar with the matter told Reuters. "Trump called me and I asked to have a conversation without formalities," Lula said. "Tomorrow we will have the negotiation talk." Brazilian markets have been closely watching potential developments after Brazil's exports suffered one of the highest tariff rates imposed by the United States. Lula and Trump have been at odds for months over the trial and conviction of Brazil's former president Jair Bolsonaro. Trump hiked a tariff on many Brazilian goods from 10% to 50% because of the case, which he called a "witch hunt." During last week's call, the Brazilian president asked Trump to remove the additional 40% tariff, according to a statement from the Lula's office. https://www.reuters.com/business/brazil-us-hold-tariff-talks-thursday-says-lula-2025-10-15/
2025-10-15 18:11
Bessent to present candidates after Trump's Asia trip Trump demands lower interest rates from Fed Cook's Supreme Court case may affect Fed appointments WASHINGTON, Oct 15 (Reuters) - U.S. Treasury Secretary Scott Bessent on Wednesday said he plans to present three or four candidates to be the next leader of the Federal Reserve to President Donald Trump for him to interview sometime after the Thanksgiving holiday in late November. Bessent said at a CNBC event held on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington that he has narrowed the list of candidates to succeed Fed Chair Jerome Powell, whose term expires in May, from 11 to five. Sign up here. It is a decision being closely watched around the world as it could offer Trump the potential to expand his influence over a central bank that has long guarded its independence to make decisions on monetary policy without interference by elected officials. "We will have to push out the next round to after the Asia trip," Bessent said, referring to Trump's scheduled visit to the region for two regional summits starting later this month. "So I suspect that will go on in November and then likely sometime after Thanksgiving, in December, we'll present the president with three or four candidates for him to interview." "At the end of the day, he'll take input like he always does from dozens, hundreds of people and then make a decision," Bessent said. Asked if one of the criteria to succeed Powell is a desire to lower interest rates, something Trump regularly demands, Bessent said: "One of the criteria is to have an open mind." Trump, a Republican, has routinely lashed out at Powell and the U.S. central bank more widely for not lowering interest rates at the speed and magnitude he desires. The Fed cut rates in September for the first time since Trump returned to office in January, lowering its benchmark short-term rate by a quarter percentage point to a range of 4.00% to 4.25% out of growing concerns about a softening job market, and more such reductions are expected at the two meetings remaining this year. Trump, though, has said rates should be as low as 1%, and at times has threatened to try to remove Powell for not abiding by his demands. In August he took the unprecedented step of attempting to fire Fed Governor Lisa Cook, an appointee of former President Joe Biden, over so-far unproven allegations of mortgage fraud. Cook, who denies the allegations, has sued to retain her position, and the case will be heard by the Supreme Court in January. PROCESS TO REPLACE POWELL COULD STRETCH INTO NEXT YEAR Bessent's remarks suggest the process for installing a replacement to Powell - including the required confirmation by the U.S. Senate - could stretch into next year. Powell was originally appointed to the Fed Board of Governors by former President Barack Obama, a Democrat, and elevated to Fed chair by Trump in 2018, but Trump soon soured on him. Trump has appointed three of the other seven Fed Board members, including the recent addition of his Council of Economic Advisers director Stephen Miran to fill a seat unexpectedly vacated by the departure in August of Adriana Kugler from the board. Miran's seat expires at the end of January, and Cook remains in place while the case over her firing continues, which may complicate how Bessent proceeds with selecting a successor. CNBC and others have reported that two of the five remaining candidates are currently on the board - Trump's other two appointees, Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller. Opting for one of them would allow Trump to consider reappointing Miran to a full 14-year term. But picking one of the other three reported finalists - National Economic Council Chair Kevin Hassett, former Fed Governor Kevin Warsh or investment firm BlackRock's chief investment officer for fixed income Rick Rieder - would likely require having a vacant seat, and Miran's is the only one set to expire in the near term. Powell, meanwhile, has not made clear whether he will remain on the Fed board after his term as chair expires in May. His board seat term extends to January 31, 2028, and he could choose to serve that out, although no former chair has remained since Marriner Eccles stayed on the board for three years after stepping down as chair in 1948. https://www.reuters.com/business/bessent-will-present-3-or-4-fed-chief-candidates-trump-after-thanksgiving-2025-10-15/
2025-10-15 17:16
LONDON, Oct 15 (Reuters) - The Bank of England will only remove proposed caps on the quantity of stablecoins individuals and businesses can hold when it is confident they do not pose a threat to financial stability. The central bank has taken a tougher stance than many authorities on embracing stablecoins, a type of cryptoasset pegged to fiat currency that has soared in popularity. Sign up here. The crypto industry has opposed the planned caps, but BoE Deputy Governor Sarah Breeden reiterated on Wednesday they were needed because of the potential impact of significant and rapid outflows of bank deposits into stablecoins. Such outflows, she said in a speech, could lead to a "precipitous drop in credit for businesses and households if the banking system were unable to increase, at scale and at pace, its use of wholesale financing from non-banks". The BoE has previously indicated it could apply limits of 10,000 pounds to 20,000 pounds ($26,778) for individuals, and higher levels for businesses, marking it out from other major countries which do not have limits. It is due to publish a consultation setting out updated proposals for a future regulatory regime next month. This will seek views on proposed levels for stablecoin limits. Breeden said the BoE would expect to remove the limits "once we see that the transition no longer threatens the provision of finance to the real economy". The largest businesses would likely be exempted from the cap so that they could hold more if required, Breeden said. Under Britain's proposed regulatory framework, the BoE would only regulate systemic sterling stablecoins, or those deemed capable of becoming widely used for payments, while the Financial Conduct Authority, which has proposed a less stringent regime, would regulate the remainder. The BoE is also working with the Treasury to introduce a resolution regime for stablecoins, so that where an issuer fails, there is continuity of services for coinholders. Breeden rejected suggestions that Britain has been slow to regulate cryptocurrencies, saying it expects to finalise its regulatory framework next year, in line with U.S. targets. ($1 = 0.7469 pounds) https://www.reuters.com/sustainability/boards-policy-regulation/boe-will-only-lift-planned-stablecoin-cap-when-confident-no-threat-2025-10-15/
2025-10-15 17:13
WASHINGTON, Oct 15 (Reuters) - The U.S. is close to finalizing a trade deal with South Korea, Treasury Secretary Scott Bessent said on Wednesday, telling reporters that he expected an announcement in the next 10 days. "We are about to finish up with Korea," Bessent told CNBC. "The devil's in the details, but we are ironing out the details." Sign up here. Bessent said U.S. and South Korean officials were meeting this week on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Washington. Speaking to reporters later on Wednesday, Bessent said he believed disagreements with South Korea over promised investments could be resolved. "I'm sure the differences can be resolved. We are in discussions now, and I would expect something in the next 10 days," Bessent said. Asked if Treasury would support setting up a currency swap facility for South Korea, Bessent said that would be up to the Federal Reserve, but he was surprised it didn't already exist. "If I were Federal Reserve chair, and I'm not, Korea would already have a currency swap facility, as would Singapore." BOTH SIDES KEEN TO GET A DEAL U.S. and South Korean officials are keen to finalize a trade agreement before the end of October, when Seoul will host an Asia-Pacific Economic Cooperation summit. U.S. President Donald Trump is expected to attend the APEC summit and meet with Chinese President Xi Jinping on the sidelines. Seoul's top policy adviser Kim Yong-beom on Wednesday said the two countries had made "meaningful progress" in negotiations over $350 billion of investments that Seoul had pledged to make in the U.S. in exchange for reduced U.S. trade tariffs. The promise was made in a preliminary trade deal announced in July. In an interview with a YouTube channel, Kim said U.S. negotiators made a new proposal about how South Korea could implement the investment package, but gave no details. President Lee Jae Myung told Reuters last month that South Korea's economy could plunge into crisis rivaling its 1997 meltdown if the government accepted current U.S. demands in the trade talks without safeguards. https://www.reuters.com/world/asia-pacific/bessent-says-us-close-finalizing-trade-deal-with-south-korea-2025-10-15/
2025-10-15 17:12
SAO PAULO, Oct 15 (Reuters) - Brazil's central bank believes that since its latest policy meeting the current level of its benchmark interest rate at 15% is sufficient to bring inflation to target, the bank's monetary policy director said on Wednesday. On the other hand, director Nilton David affirmed the current cycle is full of uncertainties, which prompts the bank to not hurry up policy decisions due to any specific data point or market noise, but take time to be sure about its moves. Sign up here. "At the last Copom meeting, we concluded that, yes, it does look like this level of interest rates should be the one that is going to bring us within target," he said at a Goldman Sachs conference in Washington. "But if there is anything exceptional that we would have to correct (rates) for higher or lower, we will do so." Last month, policymakers kept the Selic rate at 15%, their highest level in almost two decades, signaling a "new stage" of prolonged pause as they hope to bring inflation back to its 3% target. According to David, the decision was a "bold move" from the central bank because policymakers knew it would then require them to maintain rates for longer. He stressed policymakers are still uncomfortable with market inflation expectations, calling them "higher than we would like them to be." The central bank sees the current monetary policy as "firm" and "tight," but David cautioned the restrictive conditions have begun being perceived only very recently, mentioning the persistent strength of the labor market. Latin America's largest economy, which has grown above market expectations in the last few years, has shown signs of moderation, which proves the effects of monetary policy, he added. https://www.reuters.com/world/americas/brazils-central-bank-director-says-current-interest-rate-should-bring-inflation-2025-10-15/
