Aurelia Butler

NEW YORK (Reuters) -Recent disappointing inflation data affirms the case for the U.S. Federal Reserve to hold off on cutting its short-term interest rate target, Fed Governor Christopher Waller said on Wednesday, but he did not rule out trimming rates later in the year.”There is no rush to cut the policy rate” right now, Waller said in a speech at an Economic Club of New York gathering. Recent data “tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory toward 2%.”Rate cuts are not off the table, however, Waller said, noting that further progress expected on lowering inflation “will make it appropriate” for the Fed “to begin reducing the target range for the federal funds rate this year.”It could take a few months of easing inflation data to gain that confidence, but until then, a strong economy gives the Fed space to take stock of how the economy is performing, Waller said.Pushing back the start of rate cuts will likely affect how much easing happens this year, he said. “It is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data.”Waller’s comments were his first since last week’s Fed policy meeting where officials, as expected, maintained the overnight policy rate at 5.25% to 5.5%. Policy makers also affirmed forecasts from year-end 2023 for three rate cuts this year, based on the expectation that inflation will fall back toward 2% as the year moves forward. However, unexpectedly strong inflation this year has called into question whether the Fed can deliver on its forecast. Fed officials are waiting to see if recent data reflects a temporary setback in the effort to reduce price pressures, and if so, this could mean dialing back rate cut expectations for the year.At the press conference following last week’s policy meeting, Fed Chairman Jerome Powell said current policy risks are “two sided.””We’re in a situation where if we ease too much or too soon, we could see inflation come back, and if we ease too late, we could do unnecessary harm to employment and people’s working lives,” he said. “We want to be careful” and the strength of the economy gives the Fed space to watch the data before deciding what to do with interest rate policy, he added.At the end of February, Waller signaled he was among the officials with some skepticism about any near-term rate cuts, given that the economy is showing strong growth amid a very strong labor market.In comments after his formal remarks on Wednesday, Waller said there is an extremely high bar to the central bank raising rates. “Something would really have to dramatically change on the inflation front to think about” pushing rates higher, he said. Instead, he said, the question before the Fed is when to ease rates and “it’s just a question of when you start.” More

Albanese’s centre-left Labor government has been boosting spending to underwrite new wind, solar and battery projects with more than A$40 billion of investment committed since coming to power in 2022. The government is targeting 82% renewable power by 2030 in the energy grid from around 40% now.”Australia should not be the last link in a global supply chain built on an Australian invention,” Albanese said in a statement.”We have every metal and critical mineral necessary to be a central player in the net zero transformation, and a proven track record as a reliable energy producer and exporter.”One in three Australian homes have installed roof solar panels, the highest uptake in the world, but only 1% of those are manufactured in the country.The initiative will include production subsidies and grants, and help manufacture solar panels at the site of Australia’s top power producer AGL Energy (OTC:AGLXY)’s former coal-fired Liddell Power Station, Albanese told ABC Radio.The domestic manufacturing of panels will help avoid any potential disruption to trade in the future, similar to issues faced during the COVID-19 pandemic, and it would support jobs as coal-fired power stations retire, Albanese said. “There are other planned closures in the future … we (must) look for opportunities that workers continue to be employed in alternative, high-paying secure jobs,” he said.The Australian Renewable Energy Agency (ARENA) will help with the design and delivery of the initiative. ARENA will look at the entire supply chain from ingots and wafers to cells, module assembly, and related components, including solar glass and inverters.($1 = 1.5314 Australian dollars) More

“A diversified and resilient economy with solid growth, extensive monetary policy flexibility, and benefits associated with the unique status as the issuer of the world’s leading reserve currency underpin the U.S. sovereign rating,” S&P said.It expects the Federal Reserve System, which provides the U.S. with considerable monetary policy flexibility, to navigate the challenges of lowering domestic inflation and addressing financial market vulnerabilities. Earlier in the month, peer Fitch affirmed United States’ long-term foreign currency sovereign credit rating at “AA+” with a “stable” outlook. More

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(Reuters) -Jefferies Financial’s first-quarter profit missed analyst expectations, after it lost money on an investment in hedge fund Weiss Multi-Strategy Advisers, which has since been closed down.The lower-than-expected profit overshadowed gains in Jefferies’ investment banking and asset management divisions.Shares of the New York-based bank slipped 1.4% to $45.5 in after hours trading. Jefferies disclosed a pre-tax loss of $55 million linked to Weiss. “We are disappointed in the outcome at Weiss Multi-Strategy, but we are pleased that the shutdown was orderly and investors protected,” Jefferies said in its earnings announcement.Excluding one-time charges, the bank earned 69 cents a share, below analysts’ average estimate of 75 cents a share, according to LSEG data. Investment banking revenue in the first quarter jumped 31% from a year earlier to $739.7 million, amid rising activity across its advisory as well as equity and debt underwriting businesses.”Our investment banking pipeline continues to strengthen,” Brian Friedman, the company’s president, told Reuters. “We are optimistic about the rest of this year into next year.”Investment banking giants have been hoping for a recovery after almost two years of dismal activity in mergers and acquisitions, as rising interest rates deterred companies from striking deals. As activity picks up, industry executives are predicting better times ahead.”You are starting to get those announcements, you are starting to get momentum, the pipeline is filling,” Friedman said. Net earnings attributable to Jefferies’ common shareholders rose 12% compared with a year earlier to $149.6 million, or 66 cents per share, in the three months ended Feb. 29. Revenue from Jefferies’ asset management unit jumped nearly four-fold to $273.4 million in the first quarter from $68.5 million a year earlier, the bank said, citing strong performance across its investment strategies and funds.Capital markets revenue rose 9% to $711.6 million, the third-best quarterly performance for the division.Jefferies’ earnings are closely watched by investors and analysts as a precursor to results from the biggest U.S. banks, which will begin to be released from mid-April. More

(Reuters) – A look at the day ahead in Asian markets.The yen dam has been breached, but hasn’t burst. Not yet, anyway. The currency’s brief slide on Wednesday to a new 34-year low near 152 per dollar triggered an emergency meeting of Japan’s three main monetary authorities, suggesting direct intervention in the market to stop what they consider disorderly and speculative moves is imminent.Asian market focus on Thursday will be on whether Tokyo backs up its increasingly loud and frequent warnings with action. Finance Minister Shunichi Suzuki said authorities could take “decisive steps” – language he hasn’t used since Japan last intervened in 2022.The dollar has pulled back towards 151.00 yen of its own accord, a move that will extend if hedge funds and speculators start covering their substantial short yen position. Tokyo’s helping hand would accelerate it further.But currency traders appear relaxed or skeptical about intervention. Dollar/yen volatility ticked up only slightly on Wednesday, and is still around its lowest levels in two years. Analysts at HSBC note the dollar is not in the ‘bubble-like state’ of late 2022, so the risk is any action now would yield “very limited success.” Analysts at Morgan Stanley say there is little incentive to intervene from a fundamental perspective – Japan’s terms of trade have improved, the weak exchange rate has hugely boosted exporter revenues and rate differentials are still heavily against the yen.Joseph Wang, a former senior trader at the New York Fed, was more blunt: “Time for the authorities to put up or shut up. But honestly, my guess is intervention would be a waste and just buy a little time,” he tweeted on Wednesday.Japan’s officials may not fully welcome the yen’s weakness, but equity investors do. The Nikkei is on the brink of new highs, up nearly 22% so far this year and on track for its best quarter since Q2 2009.Another 1.5% to the upside by the end of the week will seal the index’s best quarterly performance on record.If Japanese stocks are on a roll, however, Chinese stocks are again threatening to roll over. The country’s two main indexes slumped more than 1% on Wednesday, their steepest decline in a month and pushing them into the red for March.Authorities in Beijing may have welcomed Chinese industrial profits swinging back into positive territory, but they will not want to see stocks head back to their recent five-year lows and overseas investment dry up. In some respects, the keenest observers of whether Japan intervenes in the FX market are in Beijing. The yen is at its weakest level in more than 30 years against China’s yuan, giving Japan a major competitive advantage over its rival.Here are key developments that could provide more direction to markets on Thursday:- Australia retail sales (February)- Thailand industrial production (February)- Bank of Japan summary of opinions from March 18 to 19 policy meeting    (By Jamie McGeever; Editing by Josie Kao) More

The Biden administration has warned of a lengthy disruption to one of the US’s busiest ports, as carmakers reroute their shipments and insurers brace themselves for multibillion-dollar claims following the collapse of a Baltimore bridge on Tuesday. Pete Buttigieg, the US transportation secretary, said on Wednesday it was “too soon to be certain” how long it would take to reopen the port and restore the highway bridge over the Patapsco river, which was destroyed in the early hours of Tuesday after being struck by the container ship Dali.“Rebuilding will not be quick or easy or cheap, but we will get it done,” Buttigieg said.Carmakers that use Baltimore — the US’s largest vehicle import terminal — said they were rerouting trade to other east coast ports in South Carolina, New Jersey and New York, but expected bottlenecks due to increased traffic and a shortage of specialist dockside handlers.“There will undoubtedly be constraints as everyone moves to alternative routes,” said a director at one European carmaker.The White House was concerned that the economic impact of the port shutdown would “ripple out” beyond the Baltimore region, Buttigieg said, adding that he would convene with shipping companies on Thursday. “This is an important port for both imports and exports,” he said. “No matter how quickly the channels can be reopened, we know that it can’t happen overnight. And so we’re going to have to manage the impacts.”Two container ships could be seen anchored downstream of the crumpled Francis Scott Key Bridge on Wednesday, waiting to enter Baltimore or be redirected to other east coast ports.Federal investigators were cleared to board the Dali on Tuesday evening, obtaining data from the voyage recorder that could help them piece together the events that led to the collision, which is thought to have claimed the lives of six people. Vice-admiral Peter Gautier, the deputy commandant for operations for the Coast Guard, said that the Dali — which has 4,700 cargo containers on board — was “stable”, but that underwater inspections of its hull were ongoing.The Army Corps of Engineers will work with the US Coast Guard to remove the collapsed bridge from the bow of the ship. “The vessel bow is sitting on the bottom because of the weight of that bridge debris,” Gautier told reporters.Baltimore’s port is popular with carmakers because it is far inland and connected to two direct rail links. The port accounted for 15 per cent of the US’s car imports in 2023, and four-fifths of the cars imported through Baltimore came in upstream of the collapsed bridge, according to Stephen Gordon, managing director of Clarksons Research.Alternative ports on the east coast have less vehicle-handling capacity than Baltimore “and many were already seeing record levels of car imports over recent quarters”, he added. Atlantic Container Line, which operates roll-on-roll-off ships that carry finished vehicles, predicted that big car importers would have “a lot of trouble” finding spaces elsewhere on the eastern seaboard. “Alternative ports will fill up very quickly before the ‘no vacancy’ sign goes up.” Mediterranean Shipping Company, operator of the world’s largest container ship fleet, has warned customers it will be “several months” before port operations return to normal and will omit Baltimore from its services “for the foreseeable future”. One car group that exports to the US through Baltimore said the bridge collapse could measurably affect its sales in the coming months. Another significant European car exporter warned dealers to expect “delays” to vehicle shipments.“The main issue with rerouting to alternative ports is the lack of skilled labour and specialist equipment in handling the cars,” said Dominic Tribe, an automotive analyst at Vendigital. Several European carmakers, including Volkswagen and BMW, are unaffected because Baltimore’s Sparrows Point terminal, on the site of an old steelworks, is downstream of the bridge and remains open.The first ship to arrive at the Sparrows Point terminal after it reopened on Wednesday was the Wolfsburg, named after VW’s German headquarters, the port operators said.The Wolfsburg, a roll-on-roll-off vessel, arrives at the Sparrows Point terminal, east of Baltimore’s collapsed bridge, on March 26 2024 More

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