Aurelia Butler

Workforce activity increased slightly in the first two weeks of the month, according to the firm which tracks shift work in real time. It mostly declined during the prior three months.Particularly notable, the firm said, was an increase in demand for workers in retail, the first such increase since the start of the year. That could be good news for Fed Chair Jerome Powell. On Wednesday he told U.S. lawmakers the Fed was committed to bringing down too-high inflation, with a plan to raise borrowing costs high enough that demand for labor, goods and services subsides to levels more in line with supply.Continued strength in the labor market casts doubt on the view of those like former New York Fed President Bill Dudley who say a recession in the next year or so is inevitable. And it may provide some grist for Fed policymakers who believe a soft landing for the economy is possible, if difficult. Powell on Wednesday said he does not see current recession risks as being particularly elevated, though a downturn will be “challenging” to avoid, especially because so many of the factors putting upward pressure on prices are beyond the Fed’s control, such as Russia’s war and China’s COVID-19 lockdowns. But Powell also said he believes the labor market is “unsustainably hot,” suggesting that he would welcome some cooling.The U.S. Labor Department releases its jobs monthly report in on July 8. More

TUNIS (Reuters) – The International Monetary Fund said on Wednesday it welcomed an economic reform program announced by the Tunisian government this month and is ready to start negotiations in coming weeks over a loan program.Tunisia, which is facing a financial crisis, is seeking to reach a deal on a $4 billion IMF loan in return for an unpopular reform package to shore up its struggling public finances. The IMF statement comes after Jihad Azour, director of the Fund’s Middle East and Central Asia Department, met President Kais Saied and Prime Minister Najla Bouden. “The national reform program announced by the government achieves several benefits, such as increasing credibility, making the chances of success greater than in the past,” Azour said in the statement.”After months of technical discussions with Tunisian authorities, the IMF is ready to start negotiations on the program in the coming weeks,” he added.Tunisia’s reform plan includes freezing wages, stopping recruitment in the public sector, cutting energy and food subsidies, and selling some shares in state companies.But the powerful UGTT Labor Union has strongly rejected the proposed program and launched a national strike last week in public companies.The union, which has about 1 million members, said it plans to launch a national strike in the public service as well.Last week’s strike compounded the challenges facing president Saied, who has tightened his grip on power since July 2021 when he froze parliament and sacked the cabinet – moves his opponents called a coup against Tunisia’s young democracy.Defying opponents, Saied is now seeking to overhaul the constitution so the president wields more power. More

(Reuters) – The Federal Reserve is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn, U.S. central bank chief Jerome Powell said on Wednesday.”We are not trying to provoke, and I don’t think we will need to provoke, a recession,” Powell said at a hearing before the U.S. Senate Banking Committee, although he acknowledged that a recession was “certainly a possibility” and events in the last few months around the world had made it more difficult to reduce inflation without causing one.”It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all,” Powell said. The Fed in coming months will be looking for “compelling evidence” of slowing price pressures before it eases up on the interest rate increases it kicked off three months ago.Inflation continues to run at least three times higher than the Fed’s targeted level of 2%. A gauge of price increases that excludes volatile food and energy costs may have eased somewhat last month, Powell testified, but Russia’s invasion of Ukraine and COVID-19 lockdowns in China are putting continued upward pressure on inflation.One week ago, the Fed raised its benchmark overnight interest rate by three-quarters of a percentage point – its biggest hike since 1994 – to a range of 1.50% to 1.75%, and signaled rates would rise to 3.4% by the end of this year.That steep rate hike path, designed to slow the economy, has sparked widespread concern about a recession and a weakening of labor markets, which Powell on Wednesday said were unsustainably hot.On Wednesday, Powell reiterated that ongoing increases in the Fed’s policy rate would be appropriate, with the exact pace dependent on the economic outlook. He declined to rule out a 100-basis-point move if it proved warranted.”Inflation has obviously surprised to the upside over the past year, and further surprises could be in store,” he said, repeating that policymakers would need to be nimble in response to the incoming data.’COUGHING UP BONES’Since the June 14-15 policy meeting, a number of Powell’s fellow policymakers have lined up behind his comments last week that the central bank will very likely need to raise rates by either 50 or 75 basis points at its next meeting in July.Earlier on Wednesday, Philadelphia Fed President Patrick Harker said incoming data would govern which of the two options to deliver. Chicago Fed President Charles Evans signaled later on Wednesday that he also is comfortable for now with continued rapid rate hikes, even as he nodded to the rising recession risk.”To think that we can fine tune something like this with tremendous precision — I mean, we just don’t have that ability,” Evans said. Even so, he added, there’s “tremendous” consensus at the Fed for getting rates into modestly restrictive territory. “The first thing that we’re looking at is to make sure we take the steam out of the inflation pressures,” he said. But in an indication of how inflation has emerged as a thorny political issue that threatens to tip the balance of power in Congress to Republicans in elections this November, Powell found himself under fire from both the left and right.Senator Elizabeth Warren, a Democrat representing Massachusetts, took the Fed to task for pushing through rate hikes that raised the risk of a recession that could put millions out of work.Republican Senator John Kennedy of Louisiana, in one of the more heated criticisms of the Fed’s response to inflation, said inflation was hitting his constituents “so hard they are coughing up bones.”Overall, Powell did not stray far from his remarks in his news conference that followed the Fed’s latest policy meeting, but his assertion that financial conditions had “tightened significantly” seems significant and may herald a slower pace of rate hikes, Karim Basta, chief economist at III Capital Management, wrote in a note.Interest rate futures ticked higher through the course of Powell’s appearance, as traders moderated expectations for additional big rate increases at the Fed’s remaining four policy meetings of the year.Economists polled by Reuters before the appearance see the Fed delivering another 75-basis-point interest rate hike in July, followed by a half-percentage-point rise in September, with no scaling back to quarter-percentage-point moves until November at the earliest.Fed officials’ latest projections see economic growth slowing to below trend this year while the U.S. unemployment rate – currently 3.6% – starts to tick higher. Meanwhile, they now expect inflation by year-end to drop only to 5.2% by their preferred measure, which registered 6.3% as of April. More

The IMF board also increased total access under Senegal’s 18-month credit facility to about $777 million from $650 million initially approved in June 2021, it said. Senegalese authorities are taking temporary and targeted measures to support the most vulnerable and to stabilize food prices, while preserving debt sustainability, the IMF said.”Performance under the program has been broadly satisfactory despite a challenging environment,” said Kenji Okamura, IMF Deputy Managing Director and Acting Chair.”The Senegalese economy entered 2022 with strong growth momentum but the spillovers from the war in Ukraine are hampering this rebound.”Public debt is expected to reach 75% of GDP in 2022, the statement said. More

NEW YORK (Reuters) – RedBird Capital Partners is partnering with an outgoing executive from Raymond James Financial (NYSE:RJF) Group to establish a new asset and wealth management platform, sources familiar with the matter said on Wednesday.Raymond James announced earlier on Wednesday that Haig Ariyan would depart effective July 15, saying its head of global wealth solutions was pursuing an opportunity outside the firm.Redbird will be behind this venture, the sources said. While the project is still under development and details are yet to be finalized, RedBird will fund the asset and wealth management platform, which Ariyan will build. RedBird and Raymond James declined comment.Mostly known for its investments in the sports industry, RedBird is a backer of Fenway Sports Group, which owns the Boston Red Sox baseball franchise and English soccer club Liverpool. Earlier this month, RedBird announced it was acquiring Italian soccer giants AC Milan for 1.2 billion euros ($1.27 billion).RedBird has a growing presence in financial services, though. In the last two years, it has invested in insurance-linked investment managers Aquarian Holdings and Vida Capital, as well as advisory firm Grafine Partners.Ariyan was head of wealth management in the Americas at Deutsche Bank (ETR:DBKGn) when the German lender sold its U.S. private clients unit to Raymond James in 2016. Since then, the business has operated under the Alex. Brown brand, with Ariyan as its president and chief executive, as well as head of global wealth solutions for Raymond James.($1 = 0.9451 euro) More