Economy

WASHINGTON (Reuters) -U.S. President Joe Biden pledged a $4 billion U.S. contribution to the World Bank’s International Development Association fund for the world’s poorest countries, a senior Biden administration official said on Monday.Biden announced the three-year U.S. pledge during a closed session of the Group of 20 summit in Rio de Janeiro, the official told reporters, adding that the U.S. Treasury was leading negotiations at the World Bank for the IDA replenishment. The new U.S. pledge is a record and substantially exceeds the $3.5 billion Washington committed in the previous IDA fund replenishment round in December 2021.It is unclear if U.S. President-elect Donald Trump, who has proposed cutting foreign aid in the past, will honor Biden’s pledge as he and billionaire Tesla (NASDAQ:TSLA) and SpaceX CEO Elon Musk seek to slash U.S. spending through a new government efficiency panel. An appropriation by the U.S. Congress to fund the commitment would not likely take place until after Trump takes office in January.A spokesperson for Trump’s transition team did not respond to a request for comment on the matter.’HISTORIC’ PLEDGEEarlier in Rio de Janeiro, U.S. deputy national security adviser Jonathan Finer told reporters that Biden would announce a “historic” pledge to the IDA replenishment.Finer also told reporters at a briefing on the G20 summit that Biden will launch a bilateral clean energy partnership when he meets Brazilian President Luiz Inacio Lula da Silva on Tuesday.The World Bank’s IDA fund, which provides mainly grants and very low interest loans to the poorest countries, is replenished every three years, and a pledging conference is scheduled for Dec. 5-6 in Seoul. World Bank President Ajay Banga is aiming for a record amount exceeding the $93 billion refunding in December 2021, amid rising demands from poor nations in Africa and elsewhere that are struggling with crushing debts, climate disasters, conflict and other pressures. Banga told Reuters in October that a $120 billion replenishment is possible, but that goal would require some substantial increases in country commitments.Biden’s new U.S. commitment is about 14.3% higher than its 2021 contribution. At the IMF-World Bank annual meetings in October, Spain announced plans to boost its contribution by 37% to 400 million euros ($423 million).Denmark in September announced a 40% increase in its contribution to about $492 million. More

WEST PALM BEACH, Florida (Reuters) -U.S. President-elect Donald Trump’s search for a Treasury secretary is widening after it stalled over the weekend, and he is looking at other candidates, two sources briefed on the matter said on Monday.Among the names now being considered are Apollo Global Management (NYSE:APO) Chief Executive Marc Rowan, two sources said, and former Federal Reserve Governor Kevin Warsh, according to a separate source briefed on the matter, confirming earlier reporting by the New York Times (NYSE:NYT) and the Wall Street Journal.A number of names have cycled through as possibles for the job in the new Trump administration, but no announcement has been made. However, the team making the pick has now widened the search, the two sources said on Monday. Billionaire investor John Paulson was originally one lead contender but exited the race last week, citing “complex financial obligations”. That left another lead contender, investor Scott Bessent, although banker Howard Lutnick also emerged as a top contender, Reuters reported last week. A number of other people have also been speculated for the position. Bloomberg reported on Monday that Bessent was being considered for the White House’s National Economic Council, but holding off accepting until a decision is made on the Treasury secretary. Warsh, 54, is a Visiting Fellow at the Hoover Institution at Stanford University with a long track record of hawkish views on both inflation and deficits. A former mergers and acquisitions banker at Morgan Stanley (NYSE:MS), Warsh was a White House economic policy adviser from 2002 to 2006, and was then nominated by then-President George W. Bush to be a governor on the seven-member Federal Reserve Board.Warsh left the Fed in 2011, a few months after joining his colleagues in unanimous support of expanding the Fed’s bond-buying program, and then making public his reservations about expanding the central bank’s balance sheet. Rowan is CEO of Apollo, one of the world’s biggest investors in alternative assets such as corporate credit and private equity, succeeding Leon Black in 2021.Rowan and Warsh did not immediately respond to requests for comment. A spokesperson for Bessent declined to comment. A spokesperson for Lutnick declined to comment.It was unclear if any candidates had been ruled out or if other names could be added to the mix. SCRAMBLE FOR TOP ROLEThe Treasury secretary role is one of the highest-profile cabinet posts, overseeing the country’s financial and economic policy. As such, it is one of the key roles being watched by global investors and Wall Street.Top candidates have amassed public supporters as the process has heated up. Bessent’s supporters include Republican U.S. Senator Lindsey Graham, according to an article last week in Semafor, and investor Kyle Bass, who wrote on X last week that Bessent would be the best choice for markets and citizens. “I support Bessent 100%,” Bass told Reuters by text. “As Treasury Secretary, you must fully understand the bond market, global payment flows, geopolitics, people, financial market flows, inflation, and the federal budget. Scott is far and above the best candidate for the position.” Bass added that Bessent had not been part of weekend “drama” about who would get the position. “He’s been silent and working on solutions for President Trump,” wrote Bass. A spokesperson for Graham said on Monday that he maintains his position.Other supporters include Larry Kudlow, who recently said he was a “big fan” of Bessent and that he was his “first choice” to lead Treasury, according to a Wall Street Journal story on Nov. 11; and investor Stanley Druckenmiller, who has said that Bessent, his former colleague at Soros Fund Management, was “the only guy I know who’s not only a market participant but very fluent and comfortable in academic circles,” according to an Axios story on Nov. 13. Kudlow did not respond to a request for comment. A spokesperson for Druckenmiller did not respond to a request for comment.Conservative economist and Trump adviser Steve Moore said last week he strongly favored Bessent, as he was a ballast in the right-of-center Washington movement pushing deregulation and tax cuts to promote growth.”I think most of the free-market conservatives are getting behind Scott Bessent,” Moore told Reuters last week.On the other side, two top Trump advisers, Tesla (NASDAQ:TSLA) CEO Elon Musk and Robert F. Kennedy Jr., who is Trump’s pick to head the Health and Human Services Department, sided with Lutnick for the position, sending supportive posts on social media.Musk did not immediately respond to an email seeking comment beyond his post on X. A spokesperson for Kennedy did not immediately respond to a request for comment. The Trump transition team did not immediately respond to a request for comment.As of Sunday, Trump was also considering Lutnick for another economic job, possibly that of commerce secretary, the source briefed on the matter told Reuters, speaking on condition of anonymity. That source also said that Trump’s former U.S. trade representative Robert Lighthizer was being considered for Commerce. Lighthizer did not respond to a request for comment on Commerce. More

NEW YORK (Reuters) -Activist investor Ananym Capital Management is urging healthcare products distributor Henry Schein (NASDAQ:HSIC) to refresh its board, cut costs, tackle succession planning and consider selling its medical distribution business, sources close to matter said on Monday.A sale of the medical distribution business could help drive up the share price by roughly 20%, while earnings per share could jump by some 35% if spending were curtailed, Ananym has told Schein executives, according to the sources.Henry Schein shares closed up 7.5% at $73.89 on Monday. Since January, it has lost roughly 2% in a market that has seen record highs this year.Ananym, a newly launched firm run by veteran investors Charlie Penner and Alex Silver, argues that Schein needs new board members and ultimately a new chief executive to tackle spending that has spiraled out of control, integrate recent acquisitions and nurture and hold onto new talent, the sources said.The new firm is concerned that Schein, currently valued at $9 billion, is complacent and satisfied to outperform only its direct dental distribution peers Patterson and Benco, instead of competing with the largest U.S. healthcare distribution companies like Cardinal Health (NYSE:CAH), Cencora, and McKesson (NYSE:MCK).Ananym has held informal talks with the company but is now stepping up the pressure with calls for new directors, a plan to replace CEO Stanley Bergman, who has been in the position for 35 years, and tackle other strategic priorities, the sources said.”Henry Schein regularly engages in dialogue with its shareholders with the goal of enhancing shareholder value. We analyze any shareholder input in that context,” a company representative said.The two Ananym partners have prominent resumes in the activist world. Penner, successfully challenged Exxon Mobil (NYSE:XOM)’s board in 2021 at upstart investor Engine No. 1 and previously was a partner at activist Jana Partners. Silver was a founding partner at P2 Capital Partners (WA:CPAP).The new firm, which has some $250 million in capital and began putting money to work in September, is focused on constructive, value-enhancing engagements with mid-sized public companies.Ananym has told Schein that it has recruited qualified director candidates who could replace some of the company’s 13 board members who have served too long and lack relevant industry experience, the sources said.After Schein spent more than $4 billion on acquisitions in the last five years, Ananym wants it to focus on integration of newer assets rather than on additional purchases. Shareholders who have been frustrated by the company’s decisions would gain confidence in its leadership if M&A activities were curtailed and the company were to buy back stock, Ananym has argued, the sources said. The new investment firm is pushing Schein to consider selling the medical distribution business, where it says it is quickly becoming tougher to compete and the company is not positioned to generate long-term, sustainable free cash flows. That business could be valued at $2.5 billion or more in a sale, Ananym has argued, according to the sources. The company could use proceeds to repurchase its undervalued shares, the sources said. More

TOKYO (Reuters) – The Bank of Japan will release next month its findings on the pros and cons of the various unconventional monetary easing tools used in its 25-year battle with deflation, in another symbolic step towards ending its massive stimulus.While the BOJ has said the outcome of the review will not have direct implications on near-term monetary policy, it will likely include findings and surveys that justify its plan to steadily proceed with policy normalisation.The BOJ will release the findings after its final policy meeting of this year on Dec. 18-19, when some analysts expect it to hike interest rates from the current 0.25%.The review will be the BOJ’s first attempt to take a deeper, analytical look at the drawbacks of prolonged monetary easing.Notably, it will likely explain how central banks have limited power in changing public perceptions about future price moves, as seen in the mixed results of former Governor Haruhiko Kuroda’s radical stimulus that sought to shock Japan out of a deflationary mindset.The findings of Governor Kazuo Ueda’s flagship project, which began when he took office in April last year, may offer insight into what tools the BOJ would use – and prefer not to use – in dealing with the next economic downturn.It may also include hints on what risks the BOJ may focus on as it continues to taper asset buying and raise interest rates from still-near zero levels.”We hope to provide material that will be useful in thinking about desirable monetary policy in the long run,” BOJ Governor Kazuo Ueda told a news conference on Oct. 31.The review may become a handy guide for other central banks as an encyclopedia of unconventional easing tools and their efficacy.Japan’s 25-year experience of deflation and economic stagnation forced the BOJ to become a pioneer of unconventional policies such as zero interest rates and quantitative easing.Other global central banks later resorted to similar radical measures during severe downturns such as the global financial crisis and COVID pandemic, but have been largely able to exit them fairly quickly when their economies began bouncing back.As a board member, Ueda played a key role in the BOJ’s introduction in 1999 of forward guidance – or a promise to keep rates low for a prolonged period in hope of stimulating demand.The most controversial policy came in 2013 when, under Kuroda, the BOJ launched a huge asset-buying scheme that later combined negative interest rates and bond yield control.As inflation continued to fall short of its 2% target, the BOJ conducted several reviews on the side-effects of prolonged easing, mostly to extend the lifespan of its stimulus.This time, the review will take a step-back approach on what did not quite work. Specifically, it will explain how Kuroda’s stimulus reflated growth and created jobs, but pushed up inflation only by 0.7 percentage point – not enough to achieve the BOJ’s target.It will also highlight key flaws such as how the BOJ’s huge asset buying and bond yield cap drained market liquidity, distorted asset pricing, eroded bank profitability and forced financial institutions to increase high-risk lending such as those to the property sector.Such findings will be based on nearly three dozen academic research papers by its staff, many of which have already been released by the BOJ.WHAT’S NEXT?Another takeaway would be findings and surveys showing how Japan is experiencing structural changes that allow for the BOJ to raise borrowing costs.Among them will be a survey conducted by the BOJ’s branch offices that showed how more companies now see rising prices and wages in a more positive light than in the past.Other research to be included in the review will explain how a tightening job market and rising material costs are shifting firms away from their long-held aversion to price hikes.In a speech in May, Deputy Governor Shinichi Uchida said Japan was on the cusp of eradicating a “deflationary norm,” or the perception of households and firms that prices and wages won’t rise much – remarks preluding the review’s highlight.The BOJ, however, won’t delve into thorny topics such as the cost of its huge holdings of exchange-traded funds (ETF), which could hurt its balance sheet if stock prices tank.It is also unlikely to offer a pin-point estimate on Japan’s neutral rate of interest, or the rate at which monetary policy is neither contractionary nor expansionary.The BOJ has not disclosed its own estimate on the neutral rate, which is crucial for gauging how far it may push up borrowing costs. Analysts put it somewhere around 1%, well above the BOJ’s current policy rate of 0.25%.Taken together, the review will aim at taking a neutral, scientific view over the controversy surrounding the BOJ’s radical stimulus that led a deep and sometimes emotional rift between its proponents and critics.”There won’t be straight answers to many of the issues the review touches on. But the point was to hold discussions on past monetary easing steps and highlight some positive changes happening in the economy,” said Mari Iwashita, chief market economist at Daiwa Securities and a veteran BOJ watcher.”It’s a good way to move on and comes at a nice timing, when Japan is finally seeing early signs of sustained inflation.” More

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$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More