Aurelia Butler

WASHINGTON (Reuters) -The United States on Wednesday imposed sanctions on a network of Chinese, Emirati and other companies that it accused of helping to deliver and sell Iranian petroleum and petrochemical products to East Asia, pressuring Tehran as it seeks to revive the 2015 Iran nuclear deal.The U.S. Treasury Department said in a statement the network of people and entities used a web of Gulf-based front companies to facilitate the delivery and sale of hundreds of millions of dollars in products from Iranian firms to China and elsewhere in East Asia.Washington has increasingly targeted Chinese companies over the export of Iran’s petrochemicals as the prospects of reviving the nuclear pact have dimmed.In Doha last week, indirect talks between Tehran and Washington ended without a breakthrough over how to salvage the deal, under which Iran had reined in its atomic program.Then-U.S. President Donald Trump abandoned the pact in 2018 and reimposed sanctions, spurring Iran – which says its program is for peaceful purposes – to begin violating the deal’s atomic limits.”While the United States is committed to achieving an agreement with Iran that seeks a mutual return to compliance with the (2015 nuclear deal), we will continue to use all our authorities to enforce sanctions on the sale of Iranian petroleum and petrochemicals,” Brian Nelson, the Treasury’s under secretary for terrorism and financial intelligence, said. Among those designated by the Treasury Department was Iran-based Jam Petrochemical Company over accusations it exported petrochemical products to companies throughout East Asia, many of which were sold to a U.S.-sanctioned company for shipment to China.Jam did not immediately respond to a request for comment.Also targeted was United Arab Emirates-based Edgar Commercial Solutions FZE, which the Treasury said purchased and exported petrochemical products from sanctioned Iranian companies for shipment to China.Washington said the firm used Hong Kong-based front company Lustro Industry Limited, also designated on Wednesday, to hide its role in bulk purchases of petrochemical products.Ali Almutawa Petroleum and Petrochemical Trading L.L.C., accused of being a front company for Hong Kong-based Triliance Petrochemical Co. Ltd, was also targeted.Reuters could not immediately reach Edgar Commercial Solutions FZE, Lustro Industry Limited and Ali Almutawa Petroleum and Petrochemical Trading L.L.C. for comment.Chinese refineries over the past two years have been buying large amounts of Iranian oil despite U.S. sanctions on the country’s oil exports. Oil is the lifeblood of Iran’s economy and Chinese imports have helped keep Tehran afloat. Brian O’Toole, a former Treasury official, said given Iran’s apparent hesitance to return to the nuclear deal, he expects Washington may lean more heavily on China, “because that was the clear point of leakage in the sanctions regime.””I think the message to Beijing is as long as Iran is not taking a return to the JCPOA terms seriously, you need to stop importing Iranian oil,” he said, referring to the Iran deal. Wednesday’s move freezes U.S. assets of those designated and generally bars Americans from dealing with them. Those who deal with the targeted people and entities may also be hit with sanctions.The U.S. State Department on Wednesday also targeted a Vietnamese company, Truong Phat Loc Shipping Trading JSC, and Singapore-based Everwin Ship Management Pte. Ltd., for engaging in the transport of Iranian petroleum products. Three Iran-based entities were also targeted in the action. More

(Reuters) -The head of the International Monetary Fund (IMF) on Wednesday said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks.IMF Managing Director Kristalina Georgieva told Reuters the fund would downgrade in coming weeks its 2022 forecast for 3.6% global economic growth for the third time this year, adding that IMF economists were still finalizing the new numbers.The IMF is expected to release its updated forecast for 2022 and 2023 in late July, after slashing its forecast by nearly a full percentage point in April. The global economy expanded by 6.1% in 2021. “The outlook since our last update in April has darkened significantly,” she told Reuters in an interview, citing a more universal spread of inflation, more substantial interest rate hikes, a slowdown in China’s economic growth, and escalating sanctions related to Russia’s war in Ukraine.”We are in very choppy waters,” she said. Asked if she could rule out a global recession, she said, “The risk has gone up so we cannot rule it out.”Recent economic data showed some large economies, including those of China and Russia, had contracted in the second quarters, she said, noting the risks were even higher in 2023.”It’s going to be a tough ’22, but maybe even a tougher 2023,” she said. “Recession risks increased in 2023.”Investors are growing increasingly concerned about recession risks, with a key part of the U.S. Treasury yield curve inverted for a second straight day on Wednesday, in what has been a reliable indicator that a recession is looming.Federal Reserve Chair Jerome Powell last month said the U.S. central bank was not trying to engineer a recession, but was fully committed to bringing prices under control even if doing so risked an economic downturn.Georgieva said a longer-lasting tightening of financial conditions would complicate the global economic outlook, but added it was crucial to get surging prices under control.The global outlook was more heterogeneous now than just two years ago, with energy exporters, including the United States, on a better footing, while importers were struggling, she said.Slower economic growth may be a “necessary price to pay” given the urgent and pressing need to restore price stability, she said.Georgieva cited a growing risk of divergence between fiscal and monetary policies, and urged countries to carefully calibrate those actions to avert any chance of fiscal support undermining central bankers’ efforts to control inflation.”We need to create the same strong level of coordination between central banks and finance ministries so they provide support in a very targeted way … and don’t weaken what monetary policies are aiming to achieve,” she said. More

The FDA in May said it would allow baby formula imports until Nov. 14 to ease a shortage that had left parents scrambling to feed their babies. The agency plans to issue further guidance in September on how companies that have been temporarily allowed to ship baby formula to the United States could meet the agency’s requirements to continue to supply beyond mid-November. Abbott Laboratories (NYSE:ABT)’ last month stopped production of some speciality baby formula in its plant in Michigan due to severe thunderstorms and heavy rains, just days after restarting the plant that has been at the centre of the baby formula crisis.The need to diversify and strengthen the supply chain is more important that ever, the FDA said.”The recent shutdown of a major infant formula plant, compounded by unforeseen natural weather events, has shown just how vulnerable the supply chain has become,” the agency said.Abbott had in February recalled infant formula, including Similac, made at the Sturgis, Michigan plant due to reports of bacterial infections in babies.Before the recall, Abbott controlled 40% of the infant formula market, but the market share of other companies such as Reckitt Benckiser (L:RKT) has grown since the crisis. More

WASHINGTON (Reuters) – A deteriorating inflation situation and concern about lost faith in the Federal Reserve’s power to make it better prompted U.S. central bank officials to rally around an outsized interest rate increase and a firm restatement of their intent to get prices under control, minutes of the June 14-15 policy meeting showed.Data released in the days just prior to that meeting showed consumer inflation in May had accelerated to an annualized rate of 8.6%, defying the Fed’s hopes that the pace of price increases had peaked in the spring. “Participants concurred … that the near-term inflation outlook had deteriorated since the time of the May meeting,” the minutes stated, justifying last month’s 0.75-percentage-point rate increase as part of a move to “restrictive” monetary policy.With families stressed by rising food and gas prices, and no evidence Fed actions to date had begun to arrest the fastest inflation surge in 40 years, “many participants judged that a significant risk … was that elevated inflation could become entrenched if the public began to question the resolve of the (Federal Open Market) Committee to adjust the stance of policy as warranted,” according to the minutes, which were released on Wednesday.The result was the first 0.75-percentage-point rate increase in the United States since 1994, and the promise of more to come, with participants judging that an increase of 50 or 75 basis points in the benchmark overnight interest rate would likely be appropriate at the policy meeting later this month.The group, in a show of unanimity that has erased typical fault lines between inflation “hawks” and “doves,” noted a willingness to move interest rates as high as needed to bring inflation to the Fed’s 2% target, and a need to convince the public it was prepared to do so.”Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist,” the minutes said.Since then, Fed Chair Jerome Powell has amped up his own rhetoric, declaring last week “the clock is kind of running” on the Fed to show it could tame prices before public psychology begins to change for the worse.There was concern at the meeting such a change was already happening, with “many participants” worried that “longer-run inflation expectations could be beginning to drift up.”‘A LOT OF CHANGE’The minutes did not mention the risk of recession outright, and in fact Fed officials said they thought data showed U.S. gross domestic product “was expanding in the current quarter,” with the job market still tight.But they acknowledged the risk that things could slide, and in particular that Fed policy could have a larger-than-anticipated impact. Some analysts argue that may already be taking shape, noting a recent sharp drop in oil and other commodity prices, falling bond yields, and rising recession concerns. Following the release of the minutes, one closely watched aspect of the bond market showed deepening concerns about a possible U.S. recession in coming months.”There really has been a lot of change since they last met,” said Jim Paulsen, chief investment strategist with the Leuthold Group in Minneapolis. “There’s a strong message coming from the economy and the bond market and the commodity market that (Fed policy) seems to be working and maybe the Fed would want to think about slowing down.”Upcoming jobs and inflation data will further the debate, but at this point investors expect the Fed to approve another 75-basis-point rate increase at the upcoming July 26-27 meeting as the central bank continues a rapid shift in monetary policy.Less than a year ago, officials were still pledging to keep the monetary taps wide open, with a near-zero fed funds rate and $120 billion in monthly money-creating bond purchases, until there was “substantial further progress” in the jobs market and inflation was “moderately on track” to exceed the Fed’s 2% target “for some time.” Now officials are staring at a job market considered unsustainably tight – new data for May showed there are still nearly two open jobs for each unemployed person – with inflation lodged at a high level and policymakers saying they are willing to court an economy-wide recession in order to keep public expectations about inflation in check. More