Economy

Speaking on the sidelines of the IMF World Bank Spring Meetings, European Central Bank President Christine Lagarde said she wouldn’t comment on the market implications of an event she hoped was “not on the table.”
U.S. President Donald Trump has been ramping up pressure on Fed Chairman Jerome Powell to reduce interest rates, warning the U.S. economy could slow down otherwise.
Powell had in turn last week suggested that Trump’s trade war could weigh on growth and fuel inflation.

European Central Bank President Christine Lagarde on Tuesday said she hoped that U.S. President Donald Trump firing Federal Reserve Chair Jerome Powell was not a scenario that was on the table.
Asked by CNBC’s Sara Eisen whether Trump finding a way to remove the central bank chief was a material risk to markets, Lagarde said: “I certainly hope not … I hope that it is not a risk.”

Trump appointed Powell during his first presidential mandate, but is now looking into whether the Fed chief can legally be sacked before his term expires.
Speaking on the sidelines of the IMF World Bank Spring Meetings, Lagarde told CNBC that she would not comment on the market implications of an event she hoped was “not on the table.”
Trump has been ramping up pressure on Powell to reduce interest rates, warning the U.S. economy could slow down otherwise.
Powell in turn last week suggested that Trump’s trade war could weigh on growth and fuel inflation. He did not indicate his expectations for the interest rate path ahead, but noted that “for the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”
Lagarde told CNBC on Tuesday: “We’re both used to political pressure in one way or the other.”

“I have immense respect for the work that he does, and for his loyalty to his job and to being as diligent, disciplined as possible to deliver on his mandate. For him, I think, I’m sure as it is for me, the mandate is our compass. We have to deliver on our mandate.”

The ECB and the Fed have been diverging on monetary policy.
The euro area’s central bank has consistently cut rates as inflation closes in on its 2% target and economic growth in the bloc appears lackluster. The Fed has meanwhile been keeping rates steady this year, after enacting three consecutive reductions between September and December last year.

The ECB last week cut interest rates by a further 25 basis points, making its third reduction of 2025 and its seventh trim since it began easing monetary policy last summer. In its monetary policy statement, the central bank warned of a weakened growth outlook linked to the global trade uncertainty stoked by Trump’s tariff policy.
Trump has cited ECB rate cuts during his recent attacks on Powell. On Monday, he posted on his Truth Social platform that the central bank had already cut rates seven times, and again branded Powell “Mr. Too Late.”

Scope for EU-U.S. trade negotiation

Lagarde also discussed the impact of Trump’s market-rattling tariff policy, saying that the tariff rate currently faced by the euro zone was higher than the blanket 10% now imposed on U.S. trading partners since it included 25% duties on steel, aluminum and autos. The European Union could be slapped with universal 25% tariffs without a deal.
“I am sure that there is scope for negotiations. It’s in the nature of policymakers to want to sit down and and argue their case and point out their imperatives, their red lines, their vulnerabilities, and I’m sure that there can be a dialog,” Lagarde said.
“I would be surprised if there was not such a thing,” she added.
The EU has currently paused its first tranche of counter-tariffs, a response to the rates on metals, while it engages in talks.
Lagarde said she disagreed with Trump’s view that the EU treats the U.S. unfairly on trade because of its goods surplus, noting that the relationship also spanned services and foreign direct investment.
“There is so much joint interest” between the U.S. and Europe, she said. “There might be sectors where serious negotiations need to be had, but it’s as always with trade … it’s not just in on one side, it’s on both sides.” More

The International Monetary Fund lowered its 2025 projections for U.S. growth to 1.8%, reflecting a cut of 0.9 percentage point from the forecast it delivered in January.
“The April 2 Rose Garden announcement forced us to jettison our projections — nearly finalized at that point — and compress a production cycle that usually takes more than two months into less than 10 days,” said IMF chief economist Pierre-Olivier Gourinchas.

A woman walks past the International Monetary Fund ahead of the International Monetary Fund/World Bank Spring Meetings in Washington, DC, on April 17, 2025.
Jim Watson | AFP | Getty Images

Tariffs are posing major headwinds for the U.S. and global economies, leading the International Monetary Fund to slash its 2025 growth forecast.
President Donald Trump’s April 2 rollout of “reciprocal” tariffs has not only shaken stocks – the S&P 500 is down 9% since the levies were launched – but they also have set off countermeasures from other trading partners.

“This on its own is a major negative shock to growth,” the IMF said in the executive summary of its April 2025 World Economic Outlook.
This new outlook includes a “reference forecast” for global economic growth and inflation, based on data available as of April 4 — including the “reciprocal” tariffs but excluding subsequent developments like the 90-day pause on higher rates and the exemption on smartphones — and updates the earlier outlook the IMF shared in January.
In its new projections, the IMF now calls for a U.S. growth outlook of 1.8% in 2025, down 0.9 percentage point from its January forecast.
The IMF also cut back its global growth forecast to 2.8% in 2025, down 0.5 percentage point from its previous estimate.
“The April 2 Rose Garden announcement forced us to jettison our projections — nearly finalized at that point — and compress a production cycle that usually takes more than two months into less than 10 days,” chief economist Pierre-Olivier Gourinchas wrote in the April report. 

“The common denominator … is that tariffs are a negative supply shock for the economy imposing them,” he said. 
Higher inflation forecasts for advanced economies
The IMF also revised its expectations for headline inflation for advanced economies, which include the U.S., the United Kingdom and Canada, to 2.5% for 2025, reflecting an increase of 0.4 percentage point from January’s projection.
The U.S. inflation outlook was also revised higher by 1 percentage point from January, where it was estimated above the 2% range.
“For the United States, this reflects stubborn price dynamics in the services sector as well as a recent uptick in the growth of the price of core goods (excluding food and energy) and the supply shock from recent tariffs,” the IMF noted in its April report.
The increase in inflation for major economies was offset by downward revisions across certain emerging markets and developing economies. 
The extent to which the levies pressure central banks’ efforts to lower inflation is contingent “on whether the tariffs are perceived to be temporary or permanent,” according to the IMF’s report. 
Previous bouts of market volatility have led to the U.S. dollar strengthening relative to other countries, creating upward inflationary pressure in other countries. However, the dollar has reversed this trend amid the recent market sell-off. 
“The effect of tariffs on exchange rates is not straightforward,” per Gourinchas. “In the medium term, the dollar may depreciate in real terms if tariffs translate into lower productivity in the US tradables sector, relative to its trading partners.”
Get Your Ticket to Pro LIVE
Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.
Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited! More

The company, which has branched out from Greek-style yogurt, will invest more than $1 billion in the plant in the town of Rome.Chobani got its start in 2005 in the middle of New York State, in a decades-old Kraft factory that had become defunct, initially hiring just a few of its workers to produce Greek-style yogurt.Two decades later, the company — now one of the nation’s biggest producers of dairy products — is opening another plant nearby, to significantly more fanfare and economic impact.Chobani and New York State plan to announce on Tuesday that the company will open a million-square-foot factory in Rome, N.Y., costing at least $1.2 billion, that will be able to make one billion pounds of dairy products a year. Company executives describe the plant, which they reckon will be the biggest dairy factory in the United States, as a much-needed expansion to fulfill growing demand.“We’ve been growing, but that has accelerated dramatically over the last few years, eating up a lot of our capacity,” Hamdi Ulukaya, Chobani’s founder and chief executive, said in an interview. “These are the preparations for growth that’s coming and that we’re experiencing.”The new manufacturing center, which is expected to nearly double Chobani’s work force in New York State, is the latest sign of the company’s ambitions. Chobani already claims to be one of the fastest-growing food companies in the United States, with net sales last year rising 17 percent, to $2.96 billion, and adjusted pretax earnings rising 26 percent, to $509 million.Chobani has said that it now controls about a fifth of the American yogurt market, citing Nielsen data. It has also branched out well beyond Greek-style yogurt, the product category it helped pioneer. The company now makes creamers, oat milk, and — since its $900 million acquisition of La Colombe in 2023 — coffee beverages. (Mr. Ulukaya last year also personally bought Anchor Brewing, a centenarian San Francisco brewer, after it went out of business.)We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Retail executives huddled with the president amid fears that tariffs could result in higher prices.When President Trump’s steep tariffs threatened to send the price of iPhones soaring, Apple’s chief executive, Tim Cook, called the White House — and soon secured a reprieve for his company and the broader electronics industry.Almost immediately, top aides to Mr. Trump insisted they had not strayed from their promise to apply import taxes across the economy with minimal, if any, exceptions. But the carve-out still caught the attention of many businesses nationwide, igniting a fresh scramble for similar help in the throes of a global trade war.Top lobbying groups for the agriculture, construction, manufacturing, retail and technology industries have pleaded with the White House in recent days to relax more of its tariffs, with many arguing that there are some products they must import simply because they are too expensive or impractical to produce in the United States.On Monday, executives from retailers including Home Depot, Target and Walmart became the latest to raise their concerns directly with Mr. Trump, as the industry continues to brace for the possibility that steep taxes on imports could result in price increases for millions of American consumers.“We had a productive meeting with President Trump and our retail peers to discuss the path forward on trade, and we remain committed to delivering value for American consumers,” a Target spokesman, Jim Joice, said in a statement.Doug McMillon, Walmart’s chief executive, has previously acknowledged the many “variables” surrounding Mr. Trump’s tariffs and retail prices. A spokeswoman for Walmart confirmed the meeting on Monday, describing the conversation in a statement as “productive.” Other companies did not respond to requests for comment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to FirstFT Asia. In today’s newsletter:China pulls back from US private equity investmentsCATL’s battery breakthroughThe legacy of Pope FrancisChinese state-backed funds are cutting off new investment in US private equity, according to several people familiar with the situation, in the latest salvo against President Donald Trump’s trade war.What to know: State-backed funds have been pulling back from investing in the funds of US-headquartered private capital firms in recent weeks in response to pressure from the Chinese government, according to people with knowledge of the matter. Chinese investors would no longer make new fund commitments to US firms, the people said. One added that some were backing out of allocations they had been planning to make, in cases where they had not yet made a final commitment. Why Chinese funds are pulling back: Multiple buyout executives said Chinese investors had changed their approach to US private equity since the trade war began. China has borne the brunt of US tariffs announced in the past three weeks that threaten to significantly curtail trade between the world’s two biggest economies. Trump has imposed new tariffs of up to 145 per cent on Chinese exports and Beijing has retaliated with 125 per cent tariffs.Why it matters: In recent decades, Chinese sovereign wealth funds have poured billions of dollars into many of the largest US private capital groups including Blackstone, TPG and Carlyle Group. Top industry executives told the FT that the fallout from Trump’s trade war was prompting some evaluation of where to invest. “There definitely are questions from global investors and clients about what’s happening here,” Blackstone president Jonathan Gray said on an earnings call last week. US-China trade war: Beijing has warned it will retaliate against countries that negotiate trade deals with the US “at the expense of China’s interests”.Opinion: Ruchir Sharma explains how the trade war will reorder the global economy — not burn it down.Here’s what else we’re keeping tabs on today:Economic data: South Korea publishes March PPI inflation rate data and Hong Kong reports monthly labour market figures.Global economy: The IMF’s World Economic Outlook is published. Kristalina Georgieva, the managing director of the IMF, warned last week that the fund was preparing to cut growth forecasts amid trade turmoil and market volatility.China-Kenya ties: Kenyan President William Ruto begins a five-day state visit to China.Don’t miss the opportunity to join Unhedged’s Robert Armstrong and other FT experts on Wednesday as they discuss how Trump’s policies are shaping markets in a subscriber-only webinar. Register for free.Five more top stories1. China’s CATL has unveiled upgraded battery cells it claims can offer faster charging for electric vehicles than its rival BYD. The world’s biggest EV battery maker said yesterday that a new version of its flagship Shenxing battery cell could offer a 520km range from just five minutes of charging time. Read more about CATL’s breakthrough.2. Wall Street stocks and the dollar tumbled amid mounting uncertainty over the US economy as Trump renewed his attacks on Federal Reserve chair Jay Powell. The dollar fell to a three-year low against a basket of its big trading partners after the US president stepped up his criticism of Powell — whom he called “Mr Too Late” — for not cutting rates.More US news: Harvard University has sued the Trump administration to block its “unlawful” efforts to freeze more than $3bn in federal funding and increase government oversight of the venerable institution. 3. US and Philippine forces are to conduct their first “full battle test” for fighting together in flashpoints such as Taiwan or the South China Sea. The two countries’ annual Balikatan exercises, which began yesterday, combine elements practised over the past two years — such as targeting enemy ships with missiles from shore or protecting islands from attack — into a war scenario under realistic conditions.4. The US Federal Trade Commission has sued ride-hailing app Uber, saying it made “false or misleading” claims about its subscription service. The case signals that the Trump administration will continue to clamp down on Big Tech groups despite recent overtures made by executives in the industry.5. Crypto casino takings have soared to tens of billions of dollars a year, new data showed, as gamblers bypassed blocks in their home countries to bet on unregulated offshore platforms. Despite being illegal in most countries, wagers paid in cryptocurrency last year generated $81.4bn in gross gaming revenue — a fivefold rise since 2022.Obituary: Pope Francis, 1936-2025The first non-European pontiff in centuries pioneered change but was not the radical liberal of conservative imaginings More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe writer is a contributing columnist, based in ChicagoSteve Pitstick has been farming in the US Midwest for 51 years, about an hour outside Chicago, the city that grain built. Seven generations of his family have made their living off the land.Now farms like his in Illinois — the largest soyabean-exporting state in the US — are at the rough end of President Donald Trump’s US-China trade war. Illinois paid a huge price for Trump’s last trade war with China in 2018. Back then, the US lost $27bn in agricultural exports in 2018-19 alone, with losses concentrated in the Midwest. Illinois alone lost $1.41bn annualised.I caught up with Pitstick as he was rushing to get this year’s soyabean and corn crops into the ground on his son’s farm near Elburn, Illinois. Talking fast so that he could get back to moving boxes of seed around the farm with a forklift, the 66-year-old tells me he’s not fretting about the recent dramatic deterioration in trade relations with China, the top export destination for US soyabeans. And neither is the market, he says. “So far the [soyabean futures] market has proven that it doesn’t care . . . it has actually rallied since the tariffs started,” he tells me. “It will all work out in the end.” Many working in the farming sector think there will be a trade deal with China before the crops being planting now are harvested More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldIt is time to retire the phrase: “When America sneezes, the rest of the world catches a cold.” Said to have first been used in relation to Napoleonic France, that idiom lost its value after Waterloo. Donald Trump is about to destroy its modern equivalent. In foreign policy, the president’s choice no longer to be a reliable ally providing trusted security guarantees is a seismic change. It ensures that other countries will now be less willing to accept US demands. But it is on the economic front that hubris is most likely to result in humility for a country that has long since lost its status as the world’s largest producer of goods and services. It is not just that Trump’s negotiating hand with tariffs is much weaker than he imagines. It is that the rest of the world controls 85 per cent of the global economy and no longer has to follow whatever the US does. Provided cool heads prevail in global commerce, the hotheads in the White House will not dominate the landscape. This century, America’s share of global goods imports has fallen from 19 per cent to 13 per cent, according to World Bank figures. These figures probably understate the country’s true importance because imports and exports along supply chains often end up as US final demand (for example, if Chinese batteries are supplied to European electric vehicles and bought by Americans), but its share of global commerce is undoubtedly falling. The White House might seek to generate a sense of global economic dominance, bringing other countries into line for fear of the consequences. But what this century has taught us is that few crises are actually global. For sure, few economies emerged from the global financial crisis or the Covid pandemic unscathed. But there have been many more localised economic crises that did not infect the rest of the world. Brexit and the Liz Truss episode were confined to the UK. The Eurozone bore the vast brunt of its 2010-12 sovereign debt crisis. Europe alone suffered from natural gas shortages and price surges in the wake of Russia’s invasion of Ukraine. Globalisation is far from complete.The US is a sovereign nation and free to destroy its part in the global economic rules-based system it created. But in setting high tariffs and flip-flopping on them, spreading fear among immigrants and undermining the effectiveness of the US government, the policies will hit hardest at home. The stagflationary shock of generating huge business uncertainties and higher imported goods prices puts the Federal Reserve in a bind. It is struggling to articulate whether to worry more about higher unemployment or rising prices. But the inflationary effects of Trump’s tariffs hit mostly in the US. Other countries facing a demand shock can simply offset this with looser policy. Of course, there will be some collateral damage. Countries with high export shares in GDP and with the US as a very large trading partner — think Canada and Mexico — are more vulnerable. Smaller economies that export food and basic goods such as T-shirts to America are also likely to be hit hard. But when economists calibrate their models and look at the underlying realities, it is the US that looks weak. Consensus Economics, which collates private-sector forecasts, shows that economists on average expect the US economy to grow almost a percentage point less in 2025 than at the time of Trump’s inauguration, and 2026 does not look much better. Eurozone and Chinese GDP forecasts have been trimmed by far less. This week, finance ministers and central bank governors will convene in Washington for the IMF and World Bank spring meetings. There is often one country at such gatherings that has earned pariah status. No doubt fingers will point at the US this year. The only question is how polite other countries choose to be. But America’s economic problems are its own. When it shoots itself in the foot, it is the US that will be [email protected] More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Britain is to expand production of explosives as the government seeks to strengthen its defence resilience and reduce the country’s reliance on imports, including from the US.BAE Systems, Britain’s biggest defence group, has over the past five years invested £8.5mn in novel manufacturing methods to be able to produce its own supply of cutting-edge explosives and propellants. The company previously imported RDX explosives, which are used in 155mn rounds for British army guns and other weapons, from the US and France.The new manufacturing methods will remove the need for nitrocellulose and nitroglycerine, key raw materials for the production of energetics and propellants used in ammunition and which have been in high demand since the war in Ukraine. Defence contractors have struggled to scale up output of ammunition because of supply chain constraints of various outputs, including nitrocellulose, also known as “guncotton”. Germany’s Rheinmetall earlier this month agreed to buy a small producer of propellants for ammunition to strengthen its supply chain. BAE’s “leap forward in synthetic energetics and propellant manufacture will strengthen the UK’s supply chain resilience,” said Steve Cardew, business development director for the company’s maritime and land defence solutions. The novel methods would also “support our ramp up of critical munitions production to meet growing demand in response to the increasingly uncertain world we’re living in”, Cardew added. The move comes amid growing concerns over Washington’s commitment to its Nato allies under the Trump administration. It will allow BAE and the UK to produce munitions that do not contain parts from the US. A pilot of the new manufacturing technology has already demonstrated that the explosives can be produced in small nodes, removing the need for a large-scale factory, according to BAE. The company plans to erect shipping containers at sites across the UK to produce the materials. BAE also announced that by the summer it expects to have increased production of 155mm artillery shells 16-fold over the past two years to meet the demand. The 155mm ammunition is the standard for most Nato howitzers — long-range artillery launchers — including America’s M777 and France’s Caesar, both of which have been sent to Ukraine. BAE said it had invested more than £150mn in its UK facilities over the past three years, including in a new explosive filling facility at Glascoed in south Wales which will become operational in the summer. The company secured a £280mn contract from the Ministry of Defence to boost output in 2023. More