Aurelia Butler

LOS ANGELES (Reuters) – The spectacular explosion of SpaceX’s new Starship rocket minutes after it soared off its launch pad on a first flight test is the latest vivid illustration of a “successful failure” business formula that serves Elon Musk’s company well, experts said on Thursday.Rather than seeing the fiery disintegration of Musk’s colossal, next-generation Starship system as a setback, experts said the dramatic loss of the rocket ship would help accelerate development of the vehicle.Images of the Starship tumbling out of control some 20 miles up in the sky while mounted to its Super Heavy rocket booster before the combined vehicle blew to bits dominated media coverage of the highly anticipated launch.SpaceX acknowledged that several of the Super Heavy’s 33 powerful Raport engines malfunctioned on ascent and that the booster rocket and Starship failed to separate as designed before the ill-fated flight was terminated. But SpaceX executives including Musk – the founder, CEO and chief engineer of the California-based rocket company – hailed the test flight for achieving the major objective of getting the vehicle off the ground while providing a wealth of data that will advance Starship’s development.PRACTICE MAKES PERFECTAt least two experts in aerospace engineering and planetary science who spoke with Reuters agreed that the test flight delivered benefits.”This is a classical SpaceX successful failure,” said Garrett Reisman, an astronautical engineering professor at the University of Southern California who is a former NASA astronaut and is also a senior adviser to SpaceX.Reisman called the Starship test flight a hallmark of a SpaceX strategy that sets Musk’s company apart from traditional aerospace companies and even NASA by “this embracing of failure when the consequences of failure are low.”No astronauts were aboard for the crewless flight, and the rocket was flown almost entirely over water from the Gulf Coast Starbase facility in south Texas to avoid possible injuries or property damage on the ground from falling debris.”Even though that rocket costs a lot of money, what really costs a lot of money are people’s salaries,” Reisman told Reuters in an interview hours after Thursday’s launch.Reisman said SpaceX saves more money in the long run, and takes less time to identify and correct engineering flaws by taking more risks in the development process rather than keeping “a large team working for years and years and years trying to get it perfect before you even try it.””I would say the timeline for transporting people (aboard Starship) is accelerated right now compared to what it was a couple of hours ago,” Reisman said.Planetary scientist Tanya Harrison, a fellow at the University of British Columbia’s Outer Space Institute, said clearing the launch tower and ascending through a critical point known as maximum aerodynamic pressure were major feats on the first flight of such a large, complex launch system.”It’s part of the testing process,” she said in an interview. “There are a lot of accidents that happen when you’re trying to design a new rocket. The fact that it launched at all made a lot of people really happy.”She said the risks of a single flight test were small in comparison to the ambitious gains at stake.”This is the biggest rocket that humanity has tried to build,” she said, adding that it is designed to carry “orders of magnitude” more cargo and people to and from deep space than any existing spacecraft.Whereas NASA is working on a mission to retrieve samples of Martian soil and minerals measured in kilograms being collected by the Mars Perseverance rover, Starship will carry back many tons of rock, as well transport dozens of astronauts and entire lab facilities to and from the moon and Mars, Harrison said.Musk has billed Starship as crucial to SpaceX’s interplanetary exploration goals as well as its more near-term launch business, with commercial satellites, science telescopes and eventually paying astro-tourists expected to use the fully reusable rocket system for rides to space.Citing SpaceX’s rapid pace of development since its 2002 founding, leading to dozens of commercial missions a year with its workhorse rocket for low-Earth orbit, the Falcon 9, Harrison said, “it wouldn’t surprise me if we had humans on Mars with Starship in the next decade.” (Writing and reporting by Steve Gorman in Los Angeles; Additional reporting by Arlene Eiras and Joey Roulette in Washington; Editing by Leslie Adler) More

NEW YORK (Reuters) – Federal Reserve Bank of Philadelphia President Patrick Harker said Thursday the U.S. central bank will have to do more on the policy front to get still high inflation pressures back down to the 2% target. “Some additional tightening may be needed to ensure policy is restrictive enough to support both pillars of our dual mandate,” Harker said in the text of a speech to be delivered before a gathering at Wharton School of the University of Pennsylvania. “Once we reach that point, which should happen this year, I expect that we will hold rates in place and let monetary policy do its work,” he said. Harker is currently a voting member of the rate setting Federal Open Market Committee, which next meets on May 2-3 in a gathering that’s widely expected to result in a quarter percentage hike in what is now a 4.75% and 5% federal funds rate range. Fed forecasts from late March projected one more increase after that before holding steady for the year, in a view affirmed by a number of recent policy makers’ comments. In his speech, Harker said the economy remains strong and inflation is coming down, albeit slowly. Compared to the 5% annualized rise in the personal consumption expenditures price index, he sees inflation falling to 3% to 3.5% this year and to 2% in 2025. Harker said the current 3.5% unemployment rate should move up to around 4.4% this year, in a period where growth will be tepid. The bank president also said that last month’s financial sector woes will also weigh on the economy. “It will take some time to evaluate how recent events may impact overall economic activity and inflation,” the official said, adding “I expect to see tighter credit conditions for households and businesses that may slow economic activity and hiring, but the full extent is still unclear.” More

TOKYO (Reuters) -The Bank of Japan is warming to the idea of tweaking its controversial bond yield control policy later this year, but will likely keep settings unchanged at next week’s meeting as it awaits more evidence of sustained wage growth, sources say.Kazuo Ueda chairs his first policy meeting since becoming BOJ governor on April 27-28 and his appointment has heightened expectations the bank will begin unwinding its ultra-loose settings – the only question is when.With global recession fears clouding the outlook, there is no consensus within the BOJ on how soon it can end yield curve control (YCC) – a policy that sets a short-term interest rate target of -0.1% and a 0.5% cap on the 10-year bond yield.However, five sources familiar with the BOJ’s thinking say the preferred approach, for now, is to stay the course, which means the bank will make no major immediate changes to YCC and its dovish policy guidance.”Given looming overseas economic risks, it’s appropriate to maintain ultra-loose monetary policy now,” said one of the sources, a view echoed by two more sources.But the nine-member board may engage in a more lively debate on the fate of YCC at its June 15-16 and July 27-28 meetings.Doves in the BOJ see the need to spend plenty of time to ensure Japan’s economy can weather external headwinds, and allow firms to keep hiking wages next year – even if that meant missing the opportunity to phase out stimulus in the current recovery cycle, some of the sources say.The BOJ is mindful of the dangers of taking any premature steps that could be interpreted as a withdrawal of monetary support, with previous rate hikes in 2000 and 2006 having drawn strong political criticism as causing recession.”The BOJ must avoid dampening public sentiment” by sending a message that could be interpreted as an early approach of an exit, one of the sources said, a view echoed by another source.Others in the BOJ see scope to debate a tweak possibly in the coming months, emboldened by big pay hikes offered by major firms in annual spring wage talks, the sources say.An intensifying labour shortage will likely keep companies under pressure to hike wages, even if the economy slows, according to those who see room for a near-term policy tweak.”Japan’s wage dynamics appear to be changing. It’s possible for 2% inflation to be sustainably met,” one source said.In a sign the BOJ was growing confident about the outlook for wages, the bank said in a quarterly report on Thursday that pay hikes were broadening in many parts of the country, even among smaller firms.Among key factors that could shape the debate is a final tally of this year’s wage talk outcomes, due out in early July, that will show whether small firms hiked pay like their bigger counterparts did, they say.Market developments will also be crucial in determining the timing of a policy tweak, they say.As recent problems in the global banking sector make safe-haven Japanese government bonds (JGB) more attractive, the BOJ is under no immediate pressure to tweak YCC with the 10-year yield now hovering around 0.465%, off its 0.5% cap.But the central bank may consider modifying its 10-year yield target or the allowance band set around it if renewed upward pressure on JGB yields makes the cost of defending the cap hard to ignore, the sources said.With inflation exceeding 2%, markets have been rife with speculation Ueda will phase out or end his predecessor’s massive stimulus that combines YCC with a big asset-buying programme.Ueda has repeatedly said the BOJ will maintain ultra-loose monetary policy, including YCC, as sustained achievement of 2% inflation has yet to come into sight. More

WASHINGTON (Reuters) -The U.S. seeks “constructive and fair” economic ties with China, but will protect its national security interests and push back against Chinese actions to dominate foreign competitors, Treasury Secretary Janet Yellen said on Thursday.Speaking at Johns Hopkins University’s School of Advanced International Studies, Yellen laid out the Biden administration’s principal objectives for what she called an “essential” economic relationship between the world’s two largest economies, as China strikes a more confrontational posture toward the United States and its allies.”Our relationship is clearly at a tense moment,” Yellen said. “My goal is to be clear and honest, to cut through the noise and speak to this essential relationship, based on sober realities.”She said she intended to travel to Beijing “at the appropriate time” to meet with her new Chinese counterparts to help “responsibly” manage the relationship, but Treasury offered no details on the timing of a trip. Yellen made her remarks amid heightened tensions and pessimism in the U.S.-China relationship over national security issues, including Taiwan, Russia’s war in Ukraine, growing U.S. export bans on advanced technologies and China’s state-led industrial policies.International Monetary Fund Managing Director Kristalina Georgieva warned last week that such tensions and supply chain “friend-shoring” could spill into a new Cold War that would stunt global growth.Yellen contrasted strong U.S. growth with China’s slowing GDP output, arguing that the U.S. would remain the world’s unparalleled economic leader in metrics from wealth to technological innovation. But she said a growing China was in the interest of both countries, as long as it followed global rules.She took aim at China’s “no limits” partnership with Russia, calling it “a worrisome indication that it is not serious” about ending Russia’s war against Ukraine.”It is essential that China and other countries do not provide Russia with material support or assistance with sanctions evasion,” she said, warning that the consequences of any violations would be “severe.”‘HEALTHY’ COMPETITIONYellen’s remarks were the most comprehensive articulation of the Biden administration’s China strategy to date, marking a shift from a sense of “fatalism” and “great power competition” that has permeated the relationship, said Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington.”This is no call to return to the previous policies of unconditional engagement,” Kennedy said. “It was quite tough and unapologetic about U.S. efforts to defend national security and human rights.”Yellen said the administration sought to foster “healthy competition” and cooperation, where possible, on global issues such as climate change, debt relief and macroeconomic stability, though she labeled China a “roadblock” to debt restructurings for poor countries.Washington will clearly communicate its concerns about China’s increased support for state-owned enterprises and domestic firms to dominate foreign competitors, as well as “aggressive” efforts to quire American technology, including through intellectual property theft, Yellen said.But she underscored that Washington’s actions against China were motivated solely by national security concerns, not gaining a competitive economic advantage.At the same time, she said the Biden administration was not seeking a “winner-take-all” competition, and believed that healthy economic competition with a fair set of rules could benefit both countries over time.”Sports teams perform at a higher level when they consistently face top rivals. Firms produce better and cheaper goods when they compete for consumers,” she said. More

UK consumer confidence continued to recover in April, climbing to its highest level since Russia launched its invasion of Ukraine in February 2022, according to data on Friday. Research group GfK said its index of consumer confidence, a closely watched indicator of how Britons view their personal finances and wider economic prospects, rose by six points to -30 this month. The index plunged to record lows in 2022, as Moscow’s offensive sent energy prices soaring and accelerated the rising cost of goods, putting pressure on household budgets. Ashley Webb, UK economist at Capital Economics, said the uptick resulted from “fast wage growth, due to the tight labour market, and government handouts supporting nominal household incomes”.In its spring Budget, the government said it would continue to subsidise households’ energy bills through its price guarantee for three extra months from April to June. The GfK index showed that consumer confidence increased for a third consecutive month and surpassed analysts’ consensus forecast of -35. However, it remained well below zero, indicating that most respondents were downbeat about their personal finances and wider economic conditions.“There’s a sudden flowering of optimism with big improvements across the board,” said Joe Staton, client strategy director at GfK.Households were less pessimistic about their financial situation over the next 12 months, with the sub-index for this measure jumping by eight points to -13. Respondents, who were surveyed between April 3 and 13, were also more willing to make big purchases at any point in the previous year. But people’s appetite for buying expensive items “will be dependent on whether and when essential costs stabilise or fall”, noted Linda Ellett, UK head of consumer markets, retail and leisure at KPMG. “Confidence continues to be challenged by inflation and interest rates remaining elevated,” added Ellett.

UK inflation stood at 10.1 per cent in March, only slightly down from 10.4 per cent in February, according to the Office for National Statistics.Food prices rose 19.1 per cent in the year to March, putting pressure on household budgets and eroding people’s disposable income and ability to save. The Bank of England is expected to increase interest rates beyond the current 4.25 per cent when the Monetary Policy Committee meets again on May 11. More