2025-09-03 19:16

Some 2,500 staff left FEMA, including 24 senior leaders, GAO report says FEMA faces skills gaps, reduced volunteer capacity for disaster response Trump plans to wind down FEMA post-hurricane season WASHINGTON, Sept 3 (Reuters) - Recent staff losses at the U.S. Federal Emergency Management Agency, including the departure of two dozen senior leaders, could compromise the agency's ability to respond to natural disasters this year, according to a report by a government watchdog agency. Disaster experts and FEMA employees have warned that understaffing, inexperienced leadership and a prolonged hiring freeze could hobble this year's hurricane and wildfire response. President Donald Trump has said he plans to wind down FEMA and shift the responsibility for disaster response to states after this hurricane season, which lasts through November. He has criticized FEMA for being inefficient and overly bureaucratic. Sign up here. Roughly 2,500 staff left FEMA between January 25 and June 1, including 24 top career officials, said the Government Accountability Office report dated September 2 and seen by Reuters on Wednesday. About half of those staff, and 20 of the career officials, left as part of the Trump administration's voluntary incentive programs meant to slim the federal workforce, the report said. FEMA officials told the GAO that the agency is facing "significant skills gaps in its leadership cadre" and that staff losses could reduce its capacity to adequately train its workforce, the report said. FEMA officials also told the GAO they anticipate deploying fewer volunteers from other federal agencies to support with disaster response due to widespread federal workforce reductions. In 2024, FEMA deployed almost 1,300 federal volunteers during the response to hurricanes Milton and Helene, but officials anticipate only having the capacity for 600 such volunteers this hurricane season, the report said. "Should the U.S. experience a similarly catastrophic peak hurricane season in September and October 2025, as it did in 2024, meeting response needs could be a major challenge," the report said. "The staffing and resource gaps are damning and could cost lives," said Democratic Senator Andy Kim, who had requested that GAO assess FEMA's hurricane season readiness, in a statement on Wednesday. A spokesperson for the Department of Homeland Security, which contains FEMA, said the agency had successfully responded to recent disasters in Texas and New Mexico and that FEMA was now leaner and had a ready workforce. The U.S. Army Corps of Engineers also anticipates some impact to its disaster response capacity from a roughly 10% workforce reduction, the report said. https://www.reuters.com/business/environment/staff-losses-fema-could-compromise-disaster-response-says-watchdog-agency-2025-09-03/

2025-09-03 17:06

LONDON, Sept 3 (Reuters) - Bank of England Governor Andrew Bailey said on Wednesday that the future pace of quantitative tightening remained an "open decision" for its policymakers later this month. The BoE bought 875 billion pounds ($1.18 trillion) of British government bonds between 2009 and 2021 to help support the economy and since 2022 has reduced this stockpile to 558 billion pounds through a mix of outright sales and gilts maturing. Sign up here. The BoE sets the annual pace of QT once a year in September through a Monetary Policy Committee vote at the same time as a regular interest rate decision. Over the past year the BoE has reduced its holdings by 100 billion pounds, but a BoE survey of investors last month showed a median expectation that the central bank will slow the pace over the next 12 months to 72 billion pounds. However, there have been some forecasts and calls for the BoE to halt gilt sales entirely, including by one lawmaker on the House of Commons' Treasury Committee, which Bailey appeared before on Wednesday. "Just to reassure you, the decision we're going to take in the next few weeks is an open decision, very clear, nothing closed about that decision," Bailey said. The BoE estimates that net losses from QE and QT - which are underwritten by taxpayers - are likely to total around 115 billion pounds. Some critics say the BoE's approach to gilt sales is increasing these costs. Bailey said the 115 billion pound estimate did not take into account the benefit the government received from lower borrowing costs in the 2010s and early 2020s. Long-dated gilt yields rose to their highest since 1998 on Wednesday, increasing the losses which are crystallised when the BoE sells these gilts. Bailey repeated previous remarks that the BoE viewed the impact of QT on yields as low but would look "very seriously" at the "interaction" between higher long-dated gilt yields and its sales programme. Such comments have made some analysts predict the BoE will skew QT away from sales of the longest-dated bonds in its portfolio. ($1 = 0.7402 pounds) https://www.reuters.com/world/uk/bank-englands-bailey-says-september-qt-decision-is-open-2025-09-03/

2025-09-03 15:57

OTTAWA, Sept 3 (Reuters) - Canada's Prime Minister Mark Carney said on Wednesday that the upcoming federal budget would focus on both austerity and investments, adding that current government spending was unsustainable. Canada has been dealing with economic uncertainty since the start of the year, so the primary focus of the budget will be to cut operational spending and trigger investments into major projects, Carney told reporters in Toronto. Sign up here. "It's a budget of austerity and investment at the same time and that's possible if you have discipline," he said. Canada's main budget, which is usually unveiled in the parliament in April, was delayed due to federal elections and will be presented in October. During his election campaign, Carney had promised to balance the operating budget over the next three years. But with increasing defense spending, lower revenues from tariffs, the scrapping of a digital services tax and several other tax relief measures, economists say the government looks unlikely to reach that goal. Carney said federal spending had been growing at more than 7% a year on average over the last decade. "That's twice the rate of growth of the economy on average. It's not a sustainable situation," he said. "So we need to rein in spending. We need to find efficiencies." Finance Minister Francois-Philippe Champagne said in July that he had asked all ministries to find ways to cut 7.5% from program spending for the 2026-27 fiscal year, followed by 10% in the next year and 15% in the year after that. https://www.reuters.com/world/americas/canadas-budget-will-focus-austerity-investment-says-pm-carney-2025-09-03/

2025-09-03 15:49

OTTAWA, Sept 3 (Reuters) - Canadian Prime Minister Mark Carney said on Wednesday that he had a lengthy and productive conversation with U.S. President Donald Trump on Monday, covering trade issues and other topics. His comments are another recent indication that bilateral tensions might be lessening. Sign up here. The two sides have been locked in a trade war since early this year, when Trump imposed tariffs on some imports from Canada and Ottawa responded with its own countermeasures. "I last spoke to the president on Monday evening. We spoke at length on a wide range of issues, including on trade, but geopolitical, other issues. ... It was a good conversation," Carney told reporters in Toronto ahead of a cabinet meeting. Canada said last month that it would remove , opens new tabmany retaliatory import tariffs on U.S. goods and intensify talks, a move that prompted praise from Trump. But Ottawa made clear it would maintain its tariffs on imports of U.S. steel, aluminum and autos, which it described as strategic sectors. Carney also said a senior team of Canadian officials was in Washington for the latest round of talks on trade, while making clear progress would not be quick. "Don't expect immediate white smoke on one of these strategic sectors, but that's the type of conversation that we're having, and we'll continue to have," he said. https://www.reuters.com/business/autos-transportation/canadian-pm-says-he-spoke-trump-monday-had-good-conversation-2025-09-03/

2025-09-03 15:10

BoE's Bailey says markets have understood his rate message Rate futures do not fully price in rate cut until April 2026 BoE's Taylor say he would like to see 4-5 rate cuts a year BoE's Lombardelli and Greene cautious about further cuts Bailey says higher 30-year gilt yield has little impact LONDON, Sept 3 (Reuters) - Bank of England Governor Andrew Bailey said markets had understood his message that BoE interest rates would continue to move "downwards gradually over time" but that there was now less certainty about the speed of cuts. "There is now considerably more doubt about exactly when and how quickly we can make those further steps," Bailey told a hearing of the House of Commons' Treasury Committee, echoing the message he gave at a press conference after August's rate cut. Sign up here. "That's the message I wanted to get across. Now, I think actually, judging by what's happened, certainly to market pricing since then, I think that message has been understood." Bailey also said he was "very concerned" about political pressure being put on the U.S. Federal Reserve. Last month the Monetary Policy Committee voted by the narrowest of margins - 5 to 4 - to cut Bank Rate to 4% from 4.25% after an unprecedented two rounds of voting, its fifth quarter-point rate cut since starting to reduce borrowing costs in August 2024. Financial markets currently see only a one in three chance of another rate cut by the end of the year and do not fully price in a next quarter-point rate cut until April 2026, according to LSEG data. A Reuters poll of economists last month still showed a median expectation for a further rate cut before the end of this year and another one in the first quarter of 2026. Since then, inflation has picked up to 3.8% - nearly double its target and the highest in the Group of Seven advanced economies - and the BoE expects it to reach 4% in September and not return to target until the second quarter of 2027. SPLIT COMMITTEE Speaking alongside Bailey at the parliamentary hearing were Deputy Governor Clare Lombardelli and external MPC member Megan Greene - who voted against cutting rates last month - and MPC member Alan Taylor who initially voted for a half-point cut before switching to support a quarter-point reduction. Taylor said his preference would be to see rates cut at a pace of four or five cuts a year as he thought incoming wage deals were in line with inflation returning to its 2% target and did not see warning signs from what he viewed as a modest rise in household inflation expectations. By contrast, Lombardelli and Greene said they were concerned by the rise in expectations and did not think interest rates were still at a level that placed significant downward pressure on inflation. "I am not predicting that we are already at neutral, but nor am I confident that if we reduce restrictiveness much further we will still be sufficiently restrictive to return inflation to target sustainably," Lombardelli said in a written report to the committee at the start of the hearing. Earlier on Wednesday, British 30-year gilt yields rose to their highest since 1998 at 5.75%. Bailey said it was "important not to over-focus" on this as the government no longer raised significant finance from debt of this maturity and that he viewed the move as reflecting a global trend rather than UK-specific problems. https://www.reuters.com/world/uk/boes-bailey-says-markets-have-grasped-message-less-certain-rate-cuts-2025-09-03/

2025-09-03 15:09

WASHINGTON, Sept 3 (Reuters) - The U.S. Federal Reserve announced Wednesday it would host an Oct. 21 conference on payments innovation. The conference will explore emerging topics like stablecoin use cases, the intersection of artificial intelligence and payments, and the tokenization of financial products and services, the central bank said. Sign up here. https://www.reuters.com/sustainability/boards-policy-regulation/fed-announces-october-conference-payments-innovation-2025-09-03/