2025-09-03 13:56

LONDON, Sept 3 (Reuters) - Bank of England Governor Andrew Bailey said on Wednesday he was "very concerned" about threats to the U.S. Federal Reserve's independence, describing it as a "very serious" issue. Bailey was appearing before parliament's Treasury Committee when he was asked for his views on the pressure being applied by U.S. President Donald Trump on the Fed to cut interest rates. Sign up here. Trump has publicly discussed firing Fed Chair Jerome Powell and in a sharp escalation last month, he also attempted to fire Fed Governor Lisa Cook, setting off a critical legal test over the Fed's ability to function without political interference. "This is a very serious situation, I am very concerned," Bailey told the committee. "The Federal Reserve ... has built up a very strong reputation for independence and for its decision making." Bailey said he took any threats to central bank independence "very seriously" and that trading that independence against other government decisions would be a "very dangerous road to go down". "I think monetary stability and financial stability ... underpin the foundations of policy," Bailey said. "If we do those things, we enable you then to go off and take decisions in the areas that, appropriately, governments and parliament should take," he said, addressing lawmakers on the committee. https://www.reuters.com/business/finance/boes-bailey-very-concerned-about-threats-us-fed-independence-2025-09-03/

2025-09-03 13:36

LONDON, Sept 3 (Reuters) - Bank of England policymaker Alan Taylor said on Wednesday the British economy was getting closer to a "soft landing", but that monetary policy would need to be carefully assessed in the coming months as it was at a "fragile" moment. "Despite being buffeted by new shocks, we are getting closer to that soft landing (for the UK economy) now, but we are also in a fragile moment, and monetary policy will need to be carefully calibrated in the coming months to keep us on track," Taylor said in his annual report to parliament's Treasury Select Committee. Sign up here. Last month the Monetary Policy Committee voted by a 5-4 margin to cut Bank Rate to 4% from 4.25% after an unprecedented two rounds of voting. Taylor initially called for a bigger cut to 3.75% before changing his vote to ensure a majority for a cut to 4%. "My main concern has been to get inflation sustainably back to the 2% target, maintaining monetary policy restrictiveness as long as necessary but no longer, whilst being alert to two dangers," he said in the annual report. "The greater danger is that we get behind the curve, stay too tight in the short-term ... and thus ... end up in with the opposite problem: inflation actually undershooting the target and economic activity weak or in recession." https://www.reuters.com/world/uk/boes-taylor-says-uk-economy-getting-closer-soft-landing-2025-09-03/

2025-09-03 13:22

Sept 3 (Reuters) - Federal Reserve Governor Christopher Waller on Wednesday repeated his call for an interest-rate cut in September given the weakening in the labor market, and said that how fast the central bank cuts after that will depend on what happens next in the economy. "I think we need to start cutting rates at the next meeting, and then we don't have to go in a locked sequence of steps," Waller said in an interview on CNBC. "We can kind of see where things are going, because people are still worried about tariff inflation ... I would say over the next three to six months, we could see multiple cuts coming in." Sign up here. Waller, one of two Fed governors who dissented in favor of a rate-cut in July, said he believes tariffs may push up inflation over the next several months, but said he expects that to be temporary and for inflation to resume falling back toward the Fed's 2% goal in six or seven months. Given the drop in labor demand, he said, the Fed should start bringing the policy rate, now in the 4.25%-4.50% range, down toward an estimated neutral rate of 3% -- with the pace of adjustments to depend on the economic data. Waller said he has spoken with US Treasury Secretary Scott Bessent in the past but has not had an interview for the job of Fed chair and does not yet have one scheduled. Bessent is expected to have a round of interviews for the job starting Friday, the Wall Street Journal reported. https://www.reuters.com/business/finance/feds-waller-repeats-call-rate-cut-september-pace-depends-data-2025-09-03/

2025-09-03 12:58

Sept 3 (Reuters) - HSBC raised its year-end forecast for the S&P 500 index (.SPX) , opens new tab to 6,500 from 6,400 on Wednesday, marking its second upgrade in less than a month, on the back of stronger-than-expected second-quarter corporate earnings and a 'modest' impact from tariffs. HSBC's new target represents a 1.3% upside to the benchmark index's last close of 6,415.54. Sign up here. "Earnings momentum is strong, especially among technology and financials, while company commentary suggests a modest tariff impact," Nicole Inui, head of equity strategy for the Americas at HSBC, wrote in a note. Global brokerages including J.P.Morgan and Morgan Stanley have also forecast the index target to hit 6,500 by year-end. Of the 489 companies in the S&P 500 that have reported second-quarter results through Friday, 79.6% beat analysts' earnings estimates, according to data compiled by LSEG. That is higher than the prior four-quarter average of 76.4% and well above the long-term average of 67%. Investors have bet heavily on Big Tech companies' billion-dollar AI spending spree, with the index notching fresh highs last week as Nvidia's (NVDA.O) , opens new tab earnings confirmed spending related to AI infrastructure remains strong. HSBC maintained a bull-case scenario of 7,000 and a bear-case of 5,700 for the index, if tariffs weigh more heavily on margins. "We expect a Fed cut in September, but see a shallower easing cycle versus what the market is pricing in," HSBC added. https://www.reuters.com/business/hsbc-raises-sp-500-year-end-target-earnings-strength-modest-tariff-impact-2025-09-03/

2025-09-03 12:56

LONDON, Sept 3 (Reuters) - Sterling edged up off a four-week low on Wednesday as traders paused to assess the impact of a two-day bond market rout that has highlighted Britain's fiscal challenges as the government prepares its annual budget. Long-dated government borrowing costs across the world, including Britain's 30-year bond yields, touched multiyear highs on Wednesday on concerns over the fiscal health of some of the biggest economies, although a degree of calm was returning after a sharp selloff. Sign up here. Britain's 30-year borrowing costs rose to their highest levels since 1998, potentially adding to the pressure on sterling, which had already dropped more than 1% on Tuesday. But the currency was last up 0.17% at $1.3416 against the dollar, after touching its lowest level since August 6 in early trading. Against the euro, it edged 0.06% higher to 86.86 pence, remaining close to an almost four-week low touched against the single currency on Tuesday. "We expect it will be hard (for sterling) to find support if the bond market selloff continues," said Kathleen Brooks, research director XTB. ING FX strategist Francesco Pesole instead said he doesn't expect the pound to react much on any further gilt moves alone. "The reaction to (the) gilts selloff looks a bit overblown," he said. Investors are now waiting to hear more about finance minister Rachel Reeves's autumn budget, due on November 26. She is expected to raise taxes in order to remain on course for her fiscal targets, potentially adding to the challenge of speeding up the economy. "Expectations for the Budget are so gloomy, there is scope for upside surprises," said Laurence Mutkin, Director & Head, EMEA Rates Strategy at BMO. A survey published on Wednesday showed a surge in new business helped Britain's services sector grow by the most in more than a year last month as concerns about U.S. tariffs eased, but firms remained worried about the prospect of tax rises at home. Prime Minister Keir Starmer's reshuffle of his top team of advisers on Monday also renewed the focus on fiscal challenges given the UK's high levels of borrowing and slow growth. https://www.reuters.com/world/uk/sterling-edges-up-off-four-week-low-traders-assess-impact-bond-selloff-2025-09-03/

2025-09-03 12:49

PARIS, Sept 3 (Reuters) - French utility EDF's electricity production was reduced by 2.7 gigawatts on Wednesday, data from the company showed, as workers lowered power output as part of industrial action in the power and gas sector focused on pensions and wages. The action has so far been limited in scope, but demonstrations are expected to broaden in the coming weeks, reflecting the low approval ratings of the government, which faces a confidence vote on Monday. Sign up here. Nuclear power production was reduced by 2.1 GW with four reactors affected and hydropower production was down 630 megawatts, the data showed. The reductions at the Flamanville 1 and 2 reactors and the Dampierre 2 reactor are expected to last until late on Wednesday, while the Saint Alban 1 reactor is expected back online at 1300 GMT, EDF data showed. France has 57 GW of total nuclear capacity, which produces about 70% of the country's annual electricity. France is expected to remain a net power exporter throughout the day as electricity production from wind and solar made up nearly a third of total production while the disruptions were just 4.4% of overall supply, data from grid operator RTE showed. At midday, 3.7% of the total workforce at EDF was on strike, a company spokesperson said. In the gas sector, the industrial action at the Dunkirk LNG terminal has remained limited to a small impact on some work in progress, a spokesperson for Belgian gas terminal operator Fluxys said. "There is no impact on the output flow rate, neither on ship unloading operations nor on the truck loading operations," the spokesperson said. The Dunkirk LNG terminal is the second largest in continental Europe and the only terminal directly connected to two separate markets - Belgium and France - accounting for about 20% of both countries' annual gas consumption. https://www.reuters.com/sustainability/sustainable-finance-reporting/french-strike-cuts-electricity-production-2025-09-03/