Economy

VATICAN CITY – In a decisive move to address the looming financial challenges of the Vatican’s Pension Fund, Pope Francis has appointed Cardinal Kevin Farrell as the Sole Administrator. The appointment, announced in a letter to the College of Cardinals on November 19, 2024, underscores the urgent need for structural reforms to ensure the fund’s sustainability.The Pope’s letter, released by the Holy See Press Office, conveys the gravity of the pension system’s prospective imbalance, as identified by recent analyses from independent experts. The current system, according to the Pope, fails to guarantee the fulfillment of future pension obligations, necessitating immediate action.Cardinal Farrell’s new role as Sole Administrator is part of a broader commitment to economic reform within the Vatican. The Pope expressed his confidence in Farrell’s leadership, stressing the importance of this new phase for the stability and well-being of the community.The management of the Pension Fund has been a longstanding concern, with the moral responsibility to provide fair and dignified pensions to employees of the Holy See and Vatican City State being a key motivator for successive Pontiffs. Addressing this issue, however, will require difficult decisions and sacrifices from all involved.Pope Francis called for unity and collaboration among the Roman Curia and institutions connected to the Holy See, emphasizing the need for urgent structural measures to achieve sustainability. Justice and equity across generations must remain a guiding principle in this endeavor.In his plea for prayer and support, the Pope highlighted the collective responsibility of his collaborators to facilitate this necessary path of change. The appointment of Cardinal Farrell marks a significant step towards confronting the challenges facing the Vatican’s pension system.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

BRUSSELS – New car registrations in the European Union saw a marginal increase of 1.1% in October 2024, with Spain and Germany experiencing growth while France and Italy faced declines. The European Automobile Manufacturers Association ( ACEA (BIT:ACE)) reported these figures, indicating a mixed performance across major markets.Spain led the recovery with a 7.2% increase in new car registrations, and Germany followed with a 6% rise after three consecutive months of falling numbers. Contrasting these gains, France saw an 11.1% decrease, and Italy’s registrations dropped by 9.1%.Despite the modest overall growth in October, the year-to-date figures for new car registrations across the EU remained relatively stable with a 0.7% increase, totaling 8.9 million units. Spain (+4.9%) and Italy (+0.9%) reported positive performance over the ten months, whereas France and Germany experienced declines of 2.7% and 0.4%, respectively.Focusing on the electric vehicle market, battery-electric cars maintained a steady market share of 14.4% in October, but saw a 4.9% decrease in year-to-date volumes, with market share falling to 13.2% from 14% the previous year. Germany’s significant 26.6% drop in battery-electric car registrations was a major factor in this decline.Plug-in hybrid registrations also decreased by 7.2% in October, with market share dipping to 7.7%, a 0.7 percentage point decrease from the prior year. France (-26.9%) and Italy (-24.9%) recorded considerable declines in this category.On a positive note, registrations of hybrid-electric vehicles surged by 17.5% in October, with their market share climbing to 33.3%, surpassing petrol car registrations for the second consecutive month.Petrol car sales, on the other hand, fell by 6.8% overall in October, with France experiencing the largest drop of 32.7%. Diesel car registrations also declined, resulting in a market share of 10.9%.The ACEA’s report provides a snapshot of the current state of the European car market, reflecting a complex landscape of growth and decline across different segments and countries.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Should inflation flare up again, Fed Chair Jerome Powell and his colleagues could tap the brakes on their efforts to lower interest rates. That in turn could infuriate President-elect Donald Trump.
Futures traders have been waffling in recent days on their expectations for what the Fed will do next.
“All roads lead to tensions between the White House and the Fed,” said Joseph Brusuelas, chief economist at RSM.

Jerome Powell and President Donald Trump during a nomination announcement in the Rose Garden of the White House in Washington, D.C., U.S., on Thursday, Nov. 2, 2017.
Andrew Harrer | Bloomberg | Getty Images

President-elect Donald Trump and Federal Reserve Chair Jerome Powell could be on a policy collision course in 2025 depending on how economic circumstances play out.
Should the economy run hot and inflation flare up again, Powell and his colleagues could decide to tap the brakes on their efforts to lower interest rates. That in turn could infuriate Trump, who lashed Fed officials including Powell during his first term in office for not relaxing monetary policy quickly enough.

“Without question,” said Joseph LaVorgna, former chief economist at the National Economic Council during Trump’s first term, when asked about the potential for a conflict. “When they don’t know what to do, oftentimes they don’t do anything. That may be a problem. If the president feels like rates should be lowered, does the Fed, just for public optics, dig its feet in?”
Though Powell became Fed chair in 2018, after Trump nominated him for the position, the two clashed often about the direction of interest rates.
Trump publicly and aggressively berated the chair, who in turn responded by asserting how important it is for the Fed to be independent and apart from political pressures, even if they’re coming from the president.
When Trump takes office in January, the two will be operating against a different backdrop. During the first term, there was little inflation, meaning that even Fed rate hikes kept benchmark rates well below where they are now.
Trump is planning both expansionary and protectionist fiscal policy, even more so than during his previous run, that will include an even tougher round of tariffs, lower taxes and big spending. Should the results start to show up in the data, the Powell Fed may be tempted to hold tougher on monetary policy against inflation.

LaVorgna, chief economist at SMBC Nikko Securities, who is rumored for a position in the new administration, thinks that would be mistake.
“They’re going to look at a very nontraditional approach to policy that Trump is bringing forward but put it through a very traditional economic lens,” he said. “The Fed’s going to have a really difficult choice based on their traditional approach of what to do.”

Market sees fewer rate cuts

Futures traders have been waffling in recent days on their expectations for what the Fed will do next.
The market is pricing in about a coin-flip chance of another interest rate cut in December, after it being a near-certainty a week ago, according to the CME Group’s FedWatch. Pricing further out indicates the equivalent of three quarter-percentage-point reductions through the end of 2025, which also has come down significantly from prior expectations.
Investors’ nerves have gotten jangled in recent days about the Fed’s intentions. Fed Governor Michelle Bowman on Wednesday noted that progress on inflation has “stalled,” an indication that she might continue to push for a slower pace of rate cuts.
“All roads lead to tensions between the White House and the Fed,” said Joseph Brusuelas, chief economist at RSM. “It won’t just be the White House. It will be Treasury, it’ll be Commerce and the Fed all intersecting.”
Indeed, Trump is building a team of loyalists to implement his economic agenda, but much of the success depends on accommodative or at least accurate monetary policy that doesn’t push too hard to either boost or restrict growth. For the Fed, that is represented in the quest to find the “neutral” rate of interest, but for the new administration, it could mean something different.
The struggle over where rates should be will create “political and policy tensions between the Federal Reserve and the White House that would clearly prefer lower rates,” Brusuelas said.
“If one is going to impose tariffs, or mass deportations, you’re talking about restricting aggregate supply while simultaneously implementing deficit finance tax cuts, which is encouraging an increase in aggregate demand. You’ve got a basic inconsistency in your policy matrix,” he added. “There’s an inevitable crossroads that results in tensions between Trump and Powell.”

Avoiding conflict

To be sure, there are some factors that could mitigate the tensions.
One is that Powell’s term as Fed chair expires in early 2026, so Trump may simply choose to ride it out until he can put someone in the chair more to his liking. There’s also little chance that the Fed would actually move to raise rates outside of some highly unexpected event that would push inflation much higher.
Also, Trump’s policies will take a while to make their way through the system, so any impacts on inflation and macroeconomic growth likely won’t be readily apparent in the data, thus not necessitating a Fed response. There’s also the chance that the impacts might not be that much either way.
“I expect higher inflation and slower growth. I think the tariffs and the deportations are negative supply shocks. They hurt growth and they lift inflation,” said Mark Zandi, chief economist at Moody’s Analytics. “The Fed will still cut interest rates next year, just perhaps not as quickly as would have otherwise been the case.”
Battles with Trump, then, could be more of a headache for the next Fed chair, assuming Trump doesn’t reappoint Powell.
“So I don’t think it’s going to be an issue in 2025,” Zandi said. “It could be an issue in 2026, because at that point, the rate cutting’s over and the Fed may be in a position where it certainly needs to start raising interest rates. Then that’s when it becomes an issue.” More

The International Criminal Court (ICC) has issued arrest warrants for two Israeli officials, former Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant, for alleged war crimes and crimes against humanity. The ICC’s Pre-Trial Chamber I announced the decision today, asserting jurisdiction over the State of Palestine and rejecting Israel’s challenges to the court’s authority.The ICC’s ruling addressed two separate challenges submitted by Israel on September 26, 2024. The first contested the court’s jurisdiction over Israeli nationals, while the second requested a halt to proceedings and a new notification of investigation initiation. The chamber dismissed both challenges, stating that the court could exercise jurisdiction based on the territorial jurisdiction of Palestine and that a new notification was unnecessary as Israel had been informed of the investigation in 2021.The warrants, which were initially kept secret to protect witnesses and the integrity of the investigation, were made public due to ongoing similar conduct and in the interest of victims and their families. The chamber found reasonable grounds to believe that Netanyahu and Gallant were responsible for the war crime of using starvation as a method of warfare and for crimes against humanity, including murder, persecution, and other inhumane acts against civilians in Gaza from at least October 8, 2023, to May 20, 2024.The chamber’s decision highlighted that the alleged crimes were part of a widespread and systematic attack against the civilian population of Gaza, noting that the restrictions on humanitarian aid and essential goods were often conditional and insufficient to meet the needs of the population. The ICC also found grounds to believe that Netanyahu and Gallant failed to prevent or repress the commission of crimes or ensure proper investigation into the matters.The warrants stem from a declaration by the State of Palestine accepting the ICC’s jurisdiction since June 13, 2014, and its accession to the Rome Statute in January 2015. The situation in the State of Palestine was referred to the ICC Prosecutor by Palestine in May 2018, with further referrals from several other countries in late 2023 and early 2024.The ICC’s decision marks a significant move in the ongoing legal proceedings surrounding the situation in Palestine.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Tom Barkin, president of the Richmond Fed and a voting member of the Federal Open Market Committee this year, told the Financial Times that while inflation is likely to continue declining, recent progress has slowed, as indicated by monthly government data.He expressed concern over businesses passing on costs to consumers more readily than in previous years, although not as aggressively as during the pandemic. This shift, Barkin noted, is contributing to persistent pricing pressures.“We’re somewhat more vulnerable to cost shocks on the inflation side, whether they be wage-[related] or otherwise, than we might have been five years ago,” he said.Barkin, who previously served as chief risk officer at McKinsey, highlighted businesses’ apprehensions about Trump’s proposed tariffs and immigration policies, which could have inflationary effects. “I can see why the businesses think that,” he said, while adding that Trump’s emphasis on boosting domestic energy production “might be disinflationary.”US economists share these concerns, cautioning that broad tariffs on imports could stoke inflation depending on their implementation. They also warn that mass deportations could drive up prices while hindering economic growth, potentially triggering stagflation. However, Trump and his advisers dispute these claims, arguing that deregulation and tax cuts will strengthen the economy without fueling inflation.Barkin emphasized that the Federal Reserve should not preemptively adjust its monetary policy in response to anticipated changes in government policy. “We shouldn’t try to solve it before it happens,” he said.The Fed has already reduced interest rates twice this year and is considering another cut at its December meeting. Fed Chair Jay Powell recently stated that the central bank is in no rush to push rates to levels that might curb growth, citing the economy’s resilience.While Barkin declined to speculate on the December meeting’s outcome, he stressed that future decisions will rely on incoming economic data. “If you’ve got inflation staying above our target, that makes the case to be careful about reducing rates,” he said. “If you’ve got unemployment accelerating, that makes the case to be more forward-leaning.”Describing the Fed’s recent actions as a “recalibration,” Barkin suggested that questions around the pace of rate adjustments would become more relevant as the Fed approaches a “normalization phase,” bringing monetary policy closer to a “neutral” stance. More

Incoming U.S. President Donald Trump promised to impose tariffs on most imports and said Europe would pay a big price for having run a huge trade surplus for years.”Trade tensions are rising,” Patsalides told a conference. “If trade restrictions materialise, the outcome may be inflationary, recessionary or worse, stagflationary,” Patsalides said.Still, the ECB could for now continue to lower interest rates with the next move possibly coming in December, Patsalides added.”While growth in the euro area economy has been anaemic for some time now, the approach to rate cuts must be gradual and data driven,” Patsalides said. “If incoming data and new projections in December confirm our baseline scenario, there would be room to continue lowering rates at a steady pace and magnitude.” The ECB has cut rates by a combined 75 basis points to 3.25% this year and investors have fully priced in another move on Dec 12, with most also expecting cuts at each policy meeting through next June. But Patsalides also warned that inflationary pressures, particularly from potential supply shocks, still pose a risk as does the sticky nature of services price growth.Inflation has fallen rapidly in recent months and was now expected to oscillate around the 2% target in the coming months. It could then settle at the target in the first half of the 2025, earlier than the ECB last predicted. More

(Reuters) – I have been enrolled in traditional Medicare for a couple of years now, and one professional benefit is that I receive the same direct marketing pitches that my readers get every year from health insurance companies during the annual fall enrollment season.Much of it encourages me to enroll in Medicare Advantage – the commercially offered managed-care alternative to the traditional program. And this year, Advantage plan marketers have a new enticement: the changes that take effect next year in Medicare’s Part D prescription drug coverage. If you are enrolled in traditional Medicare, this pitch should throw up a big red flag, because shifting to Advantage is something you might later regret – and it can be difficult to reverse. The Part D reforms are important, and generally positive. The big change for 2025 is a hard cap on out-of-pocket prescription costs. This reform was phased in under the Inflation Reduction Act of 2022 championed by the Biden administration and Democrats in Congress. Previously, there was no limit to what you might pay if you needed high-cost drugs for conditions like cancer and multiple sclerosis.This year, the cap is $3,300; the final step is a $2,000 cap in 2025. This will provide thousands of dollars in relief to seniors – about 4.6 million Medicare Part D enrollees had already reached $2,000 or more in out-of-pocket drug costs by the end of June this year, according to federal government data. It also will give seniors greater predictability in planning their healthcare spending.But health insurance companies are revising their offerings to a greater extent than usual for next year because of changes required by the Act. If you are enrolled in traditional Medicare with a standalone Part D plan, you may find your premium jumping, or changes in deductibles or cost-sharing arrangements. That means it is important to re-check your coverage this autumn if you are in a standalone plan. The same is true if you have a Medicare Advantage plan with drug coverage wrapped in with no extra premium – the terms of that drug coverage may be changing, too.Health insurance companies are using these changes to convince traditional Medicare enrollees to shift into Advantage. I received a letter recently from  my own current prescription drug plan provider, which I am dropping because the premium and projected total costs are jumping sharply. “Since your plan premiums are increasing in 2025, now is the time to explore your plan options,” the letter states. “(Our Medicare Advantage plan) may be a better fit for you. Plus, switching to (our Advantage plan) could lower what you pay for prescriptions and monthly premiums next year.” The letter goes on to pitch the usual Advantage enticements, such as dental coverage, gym membership and the like.This is a very compelling pitch – no wonder Medicare Advantage enrollment has been growing so quickly in recent years. More than half of eligible Medicare beneficiaries (54%) are enrolled in Medicare Advantage in 2024, a figure projected to hit 64% by 2034, according to KFF, a healthcare policy research organization. But here are a few things the letter does not say: – Instead of switching to Advantage, another option that I have is to simply search the Medicare Plan Finder for a less costly Part D plan. That is what I did – instead of a $35 increase, my premium actually will fall about $25 per month in 2025, as will total projected annual costs including the deductible and cost-sharing. – I might need to look for new doctors. If I join this Advantage plan, I will need to restrict myself to in-network healthcare providers in order to access the cost savings described in the letter, possibly causing disruption to my current healthcare.- I probably cannot go back later. Enrollees in traditional Medicare (such as myself) usually pair their Part A, B and D coverage with a Medigap supplemental policy. If I drop that now in order to join a Medicare Advantage plan, I may not be able to get a Medigap down the road if I decide to go back to traditional Medicare. Medigap insurance providers are required to sell me a policy when I first sign up for Medicare, but down the road they can use pre-existing conditions to turn me away, unless I live in one of four states that have some amount of protected access rights for this critical supplemental coverage (New York, Connecticut, Massachusetts and Maine).- The drug coverage might not fit my needs. The drug coverage wrapped into an Advantage plan may – or may not – be the best fit for me, depending on the medications I take. It is important to evaluate not only the healthcare provider network, but the drug coverage.- Here is the big thing the letter does not say. Medicare Advantage might work just fine for younger and healthier retirees. But the highest rates of dissatisfaction in Advantage are reported by the oldest and sickest enrollees in the program. Consumer advocates who work with Medicare enrollees often report that the highest rates of Advantage disenrollment are among the oldest and sickest patients, who encounter problems with denial of care or extra red tape in the form of requests for prior authorization. During annual enrollment, the ad blitz for Medicare Advantage is intense, and it lacks any context about what it can mean to give up your traditional Medicare coverage.Annual enrollment ends on Dec. 7. It is always a good idea to review your Part D or Advantage plan coverage, so start by consulting the federal government’s Medicare Plan Finder. If you need assistance help, consult your State Health Assistance Program. The opinions expressed here are those of the author, a columnist for Reuters. More

VATICAN CITY (Reuters) – Pope Francis said on Thursday the Vatican’s pension fund is facing a “serious imbalance” that may require changes to its operating structure, and appointed a senior cardinal to take over the fund’s administration.In an unusual letter sent to all the world’s cardinals and to the leaders of the Vatican’s various offices, the pope did not quantify the scope of the issue. He said the changes would include “making difficult decisions that will require particular sensitivity, generosity, and willingness to sacrifice on the part of everyone”.Francis appointed Cardinal Kevin Farrell, an Irish-American prelate who has led the Vatican’s office for family issues since 2016, to take over as the fund’s administrator.The pope has expressed uncommon concern about the Vatican’s budget several times in recent months. In October, he ordered the third reduction in three years for the pay packages of the cardinals who lead the Vatican. He has also asked them to pursue a “zero deficit” agenda.The Vatican has not released a full budget statement in several years but is known to be facing a serious budget deficit.The Vatican’s finance czar estimated in 2022 that the net liability of the pension fund for post-employment benefits amounted to some 631 million euros ($664 million).The headquarters of the Catholic Church comprises two entities: the internationally recognised sovereign entity of the Holy See and the Vatican, a 108-acre city-state within Rome.They maintain separate budgets, and Vatican City income, including from the popular Vatican Museums, has often been used to plug the Holy See’s deficit, which according to Italian media stood at around 83 million euros ($87 million) last year. ($1 = 0.9505 euros) More