Economy

WASHINGTON (Reuters) -A U.S. House of Representatives committee on Wednesday approved a bill that seeks to invalidate a U.S. Postal Service (USPS) environmental review conducted as part of a deal to buy 50,000 mostly gas-powered next-generation delivery vehicles.House Oversight and Reform chair Carolyn Maloney said the bill would help USPS transition its “gas guzzling fleet to electric vehicles” and argued the USPS review that supported the purchases was faulty.Critics of the USPS plan want the postal service to buy more zero-emission electric delivery trucks. The White House and Environmental Protection Agency (EPA) have unsuccessfully asked the USPS to reconsider the deal.The bill would toss out the USPS environmental impact statement and compel it to conduct a new one. House Republican James Comer said the bill would cause a “reckless delay” in new USPS vehicles.USPS in March placed an initial $2.98 billion order for 50,000 next-generation delivery vehicles from Oshkosh (NYSE:OSK), and doubled its planned electric vehicle (EV) purchases from 5,000 to 10,019 by 2026.USPS expects the new vehicles will begin appearing on carrier routes in late 2023. They will replace many 30-year-old vehicles without airbags or other safety features.USPS said Wednesday the bill “potentially would have the effect of delaying our vehicle replacement program by a year or more, and substantially increasing the cost.”The bill “takes steps in exactly the wrong financial and operational direction,” it said.USPS has more than 230,000 vehicles, including 190,000 that deliver mail.Postmaster General Louis DeJoy told Reuters last month that USPS expects to receive about 5,000 vehicles in 2023 and about 21,000 a year after that, calling the order “a slam dunk,” given its urgent vehicle needs.”I have people out there that have trucks that are dangerous,” DeJoy said.He said in the near-term USPS needs gas-powered vehicles and said the purchase was “a very, very logical decision based on our math for our business.”USPS said in 2021 it could buy up to 165,000 vehicles from Oshkosh over 10 years but DeJoy told Reuters USPS considering various options for vehicle purchases after the initial 50,000.Last month, 16 states and others filed suit seeking to block USPS’s vehicle plan, arguing it failed to comply with environmental regulations.DeJoy, a supporter of former President Donald Trump, was named as postmaster general in 2020 by the Postal Service’s governing board. More

By Sinead CruiseLONDON (Reuters) – Citigroup (NYSE:C) is looking for a new senior manager within its Delta One operations, a trading unit that sells financial products to sophisticated investors, according to three people familiar with the matter and a job advertisement posted by the bank last week.So-called Delta One desks target investors such as pension funds, hedge funds and blue chip corporate clients.Citi is looking to name a new Head of Forward Trading based at its European headquarters in London, a job vacancy posted on professional networking site LinkedIn shows.The search follows the departure of Ali Omari, who was EMEA Head of Delta One Forwards and Sectors, one of the Delta One units, according to Omari and two sources familiar with the matter.Citi’s broader Delta One operations have been linked to a trading blunder that led to a market flash crash on May 2, the two sources said. But Omari was not involved in the event and his departure was unrelated, according to Omari and the two sources. Omari told Reuters on Tuesday that he was not at work for three weeks prior to the May 2 flash crash, and only returned to the office on May 3 to tender his resignation from the bank before taking up another opportunity.Reuters was unable to independently verify who was responsible for the flash crash and has no evidence to suggest that Omari played any role in the trading error that caused that event. A spokesperson for Citi declined to comment on the timing of the hiring plans in its Delta One operations beyond confirming the vacancy.Two of the sources familiar with the matter said the bank’s Delta One trading activities were connected to, although not responsible for, the data input blunder that caused the pan-European STOXX 600 equity benchmark to fall by more than 2 percentage points in around two minutes of trading.Citi has previously confirmed that one of its employees was behind the error that led to the market fall, but has not given details on which teams played a role. A spokesperson for Citi declined to comment on this again on Wednesday.Citi has said it is pursuing a revamp of its risk management and controls systems. It is still subject to at least two consent orders by U.S. regulators related to its internal controls after the United States’ Office of the Comptroller of the Currency (OCC) lifted a 10-year-old order in late April. More

Bonus payments stand at their highest since 2013 as a share of UK earnings, as employers seek ways to pay workers for higher living costs without committing to inflation-busting wage deals.Andrew Bailey, Bank of England governor, warned last week that intensifying pay pressures were one of the main reasons the central bank was worried high inflation would persist. “The first, second and third thing they want to talk about . . . is the tightness of the labour market. The challenges they’re having in recruitment and what that means for pay,” he said, referring to feedback from business leaders.Underlying wage growth was already running at an annual rate of around 4 per cent: well above pre-pandemic levels, although far short of inflation, according to the BoE. It warned that it was likely to pick up further over the next few months because many companies were considering awarding mid-year top-ups to pay settlements or one-off bonuses to help them retain staff.The latest official data suggest employers have increasingly been using discretionary awards to compete for scarce workers, while trying to limit the overall rise in their wage bill. Bonus payments made up around 7 per cent of average weekly earnings in the three months to February, the highest proportion since 2013. This was partly owing to a bounce-back in bankers’ bonuses, after a lean year in 2021, but pay experts said the trend also extended to sectors where big bonuses are less typical.British Airways last month adopted practices used last year by employers struggling to hire HGV drivers, nurses and warehouse workers with the airline offering new cabin crew a £1,000 welcome bonus as it seeks to address staff shortages that have forced it to cancel thousands of flights.Duncan Brown, an independent adviser on reward management, said the use of sign-on bonuses and retention payments in these sectors and other industries, such as hospitality, was “unprecedented”. In professional services bonuses were increasingly being guaranteed rather than linked to performance, he added, while big tech companies were also relying more on cash bonuses because falls in their share prices had reduced the value of stock options. “Pay awards are definitely only part of the picture at the moment,” said Sheila Attwood, a managing editor at the HR research firm XpertHR, who has seen many companies offering new recruits higher salaries than incumbents, while awarding time-limited “market supplements” to staff with key skills on top of the base pay rise offered to all employees.Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC), said many companies were offering staff more flexibility around homeworking as a way of addressing cost-of-living concerns. It cuts commuting costs so “in this environment hybrid is more attractive,” he added.However, pay experts said employers were increasingly accepting that they would need to bring their basic pay awards closer in line with inflation — given mounting evidence of people on low incomes missing meals or falling into debt to pay for essentials as living costs climb. “Most organisations have recognised that the typical 3 per cent annual raise is not going to cut it this year,” said Tom Hellier, an adviser on rewards at the HR consultancy Willis Towers Watson. Brown added: “If anything now, the emphasis is shifting back from variable to fixed pay.”A monthly survey of recruiters, published by the REC on Thursday, showed the proportion reporting higher starting salaries for both permanent and temporary staff remained near record levels in April.Carberry said this showed “how broad-based” pay pressures were across the economy. Given the scale of the squeeze on household incomes, for most companies, the pre-pandemic norm of a 2 to 3 per cent annual pay deal “doesn’t feel sustainable”, he added. More

LONDON (Reuters) – The Bank of England will probably need to raise interest rates much more sharply than financial markets expect to get soaring inflation under control, former policymakers said on Wednesday.The BoE’s Monetary Policy Committee (MPC) has raised its key interest rate four times since December to 1% – the highest level since 2009 – but still expects inflation to exceed 10% by the end of this year.”In my view the nominal interest rate – the short-term interest rate the MPC controls – will have to go up at least 250 to 300 basis points from here,” Adam Posen, who served on the MPC from 2009 to 2012, told the British parliament’s Treasury Committee.That would mean an interest rate of 3.5% to 4% – well above the 2.5% peak priced in by financial markets for June 2023.Posen, who is now the president of Washington’s Peterson Institute for International Economics, said unemployment needed to go higher – effectively requiring a recession – for inflation to fall back swiftly to the BoE’s 2% target.Last month the International Monetary Fund forecast Britain would see weaker growth and higher inflation than any other major advanced economy next year.While countries globally are suffering from soaring energy prices and supply chain bottlenecks, exacerbated by Russia’s invasion of Ukraine, Posen said the extra inflation in Britain appeared to be mostly due to Brexit.The BoE’s own forecasts imply interest rates might rise less than markets expect, as it predicts inflation will significantly undershoot its 2% target in three years if interest rates follow the path expected by markets. Annual consumer price inflation in Britain hit 7.0% in March, the highest reading in 30 years.Current MPC members typically do not talk directly about how high interest rates might go.Massachusetts Institute of Technology professor Kristin Forbes, who served on the MPC from 2014 to 2017, told lawmakers she was concerned the BoE had not been clear enough about the scale of rate hikes that might come.”Anyone who is buying a home or might have a variable interest rate on a credit card needs to be aware that rates could go up to the 3%-type level that Adam has mentioned,” she said.Charles Goodhart, who served on the BoE’s first MPC after it gained independence in 1997 and has taught at the London School of Economics, speculated that rates might need to go even higher.”It will take nominal interest rates well above 4% to actually start having a significant effect on the housing market, and my bet would be that we will go over 5%,” Goodhart told the parliamentary hearing into inflation and economic policy. More

(Reuters) -France-based TotalEnergies and U.S. power company Duke Energy Corp (NYSE:DUK) each won offshore wind leases in federal waters off the coast of North and South Carolina on Wednesday, the Interior Department said in a statement.The auction generated $315 million in winning bids, split between Duke at $155 million and TotalEnergies at $160 million. It was TotalEnergies’ second U.S. offshore wind lease secured this year.The sale is part of a broad U.S. government push to put wind turbines in federal waters along every U.S. coastline. U.S. President Joe Biden has said the nascent offshore wind industry will create good-paying jobs while creating the carbon-free electricity needed to combat climate change.”Today’s lease sale is further proof that there is strong industry interest and that America’s clean energy transition is here,” Interior Secretary Deb Haaland said in a statement.Combined, the leases cover 110,091 acres (44,552 hectares) in the Carolina Long Bay area. Once developed, they could generate 1.3 gigawatts of offshore wind energy, or enough to power half a million homes, according to the Interior Department.The auction total was far less than the $4.37 billion in high bids generated at a February wind auction for leases off the coast of New York and New Jersey. Northeastern leases were widely seen as more attractive due to the region’s high power prices and state mandates to procure offshore wind power.TotalEnergies paid $795 million for a lease at the New York Bight auction. The company could not immediately be reached for comment.A trade group noted that the Carolina sale’s winning bids were 17 times higher than a winning bid in the same region five years ago.”With three separate wind projects now in the area, and potentially more on the way, the Carolinas are positioned to be the next American offshore wind hub,” National Ocean Industries Association President Erik Milito said in a statement.The auction marked Duke’s first foray into the U.S. offshore wind market. The company is the owner of regulated utilities in North Carolina, and is working with state regulators to achieve a state goal to reduce power sector emissions by 70% below 2005 levels by 2030. More

Inflation data showed a slowdown in annual price increases in April, but a closely watched monthly price measure continues to rise at an uncomfortably brisk rate. More

Saudi Aramco has overtaken Apple as the world’s most valuable company after higher oil prices pushed shares of the world’s biggest crude exporter to record levels, while a broader tech stock sell-off weighs on the iPhone maker. The Saudi Arabian oil company’s market capitalisation on Wednesday was $2.426tn, exceeding Apple’s $2.415tn by just over $10bn. It is the first time that Saudi Aramco has regained the top spot since 2020 and follows a broader sell-off in technology stocks since the start of the year.Apple became the first company to hit a $3tn market cap in early January, although its shares have suffered in recent months as investors reassess lofty valuations in the tech sector in light of a reversal in monetary policy and worries that inflation will weaken consumers’ spending habits.Thanks for reading FirstFT Asia. Here’s the rest of the day’s news — Emily.Coronavirus news digestChina yesterday dismissed rare World Health Organization criticism of its tough zero-Covid policy, saying it was “irresponsible”.New Zealand will reopen its borders two months ahead of schedule, ending more than two years of severe entry restrictions during the pandemic. Toyota warned its profits could fall by a fifth this year because of rising energy costs and a doubling in raw material prices following pandemic-related disruptions to supplies.Lead your team’s return to the office by “managing up”. Today’s Working It newsletter details tips on how to craft the best return-to-work policy.Five more stories in the news1. Hong Kong’s Cardinal Zen arrested under national security law Hong Kong police have arrested the Chinese territory’s former most senior Roman Catholic cleric, Cardinal Joseph Zen, and three other high-profile pro-democracy activists. 2. US inflation stays at 40-year high US consumer prices rose at an annual pace of 8.3 per cent last month, more than economists’ expectations and staying at a four-decade high, underscoring the urgency of the Federal Reserve’s push to stamp out inflation.Go deeper: Inflation has hit its highest level in decades in many countries, with Russia’s invasion of Ukraine pushing up energy and food prices and squeezing households’ real incomes. See how your country compares on rising prices.3. KKR approaches Blackstone for joint Toshiba bid The US private equity group has approached Blackstone to prepare a joint bid for Toshiba, setting the stage for a showdown with Bain Capital. 4. Russia signals plan to annex Kherson Local officials installed by Moscow in Kherson in southern Ukraine said they intended to ask President Vladimir Putin for the region to join Russia, in the clearest sign yet that the Kremlin plans to annex the province.

Protesters shout at Russian soldiers during a pro-Ukraine rally in Kherson in March. The protests have since fizzled out after troops violently dispersed them © AP

5. Global investment banks in China finally turn a profit All but one of the global investment banks in China finally managed to eke out a profit last year, according to figures reported by the banks and seen by the Financial Times. A regulatory shift by Beijing in the past two years has allowed western banks to take full control of their operations.The day aheadAsean summit The US will host the delayed Summit for the Association of Southeast Asian Nations, where officials are set to evaluate the Asean-US Strategic Partnership. Leaders of two Asean nations, the Philippines’ President Rodrigo Duterte and Myanmar’s junta chief Min Aung Hlaing, will not attend. (SCMP)India April CPI data Last month’s consumer price index figures are set to be released on Thursday. The data come a day after India’s central bank said it was set to raise its inflation forecast next month, Bloomberg reported. (Bloomberg)Foxconn Technology earnings The company’s results will give some indication of the extent of problems in the tech supply chain and whether Covid lockdowns in China will further undermine the situation, hitting consumer electronics manufacturers worldwide.Join us in person or online at the FT Business of Luxury Summit on May 18-20 to hear from luxury leaders including British Vogue, Valentino, Ermenegildo and YSL.What else we’re readingMarcos myths lift dictator’s son to power in Philippines The Marcos family’s comeback has been decades in the making. Their campaign was aided by what researchers said was co-ordinated online promotion of false historical narratives. “Marcos folklore was seeded on social media and they waited for it to get traction,” said one professor of global digital media.How SMBC Nikko fell from grace After an 18-month regulatory probe into alleged market manipulation during which one trader died after intense questioning, large clients have fled the tarnished Japanese brokerage. Business, morale and prospects at SMBC Nikko are “apocalyptically bad”, according to one veteran of the brokerage.‘New management, same story’ at Peloton Tuesday’s results left analysts asking old questions of the connected fitness company: is Peloton’s long-term vision of the size of its potential market realistic, and is it even wise to be pursuing a mass-market strategy when it built its brand on the fanatical loyalty of a wealthy but far smaller group of customers?Clues but few answers in childhood hepatitis mystery Scientists are mystified by a new form of hepatitis, which is thought to be afflicting more than 300 childrenacross the world and might be causing a wider, undetected wave of milder liver damage. Lockdowns, adenoviruses, Covid-19 and exposure to dogs have all been blamed. FT business books: May edition Addressing social class at work and navigating politics to get things done as well as a guide to “superior management effectiveness” — our Work & Careers team review this month’s top titles. Try this These electric chopsticks cut your salt intake. No, really. Japanese people consume about twice the amount of salt recommended. A new gadget purports to help.

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(Reuters) -The Dallas Federal Reserve on Wednesday named Lorie Logan as its next president, filling the vacancy left by Robert Kaplan’s departure last fall after an outcry over the ethics of his active stocks trading during the coronavirus pandemic. Logan, an executive vice president at the New York Fed and the manager of the Fed’s System Open Market Account, will start her new job on Aug. 22, the Dallas Fed said in a statement.The U.S. central bank is in the midst of its most rapid policy tightening in decades to deal with inflation that is rising at its fastest pace since the early 1980s. Data released on Wednesday showed consumer prices rose at an annual pace of 8.3% in April. Logan, 49, will join the presidents of the 11 other regional Fed banks and the Washington-based Fed Board of Governors in setting monetary policy for the world’s biggest economy. Her first policy meeting will be on Sept. 20-21.She will be the Dallas Fed’s first permanent female chief. A senior official in the New York Fed’s markets division since 2012, Logan currently manages the central bank’s $9 trillion portfolio of securities, cash and other assets. Those holdings roughly doubled during the pandemic as the Fed sought to ease financial conditions and bolster the economy, and under Logan the Fed is now poised to trim those assets, beginning next month, as part of its overall bid to raise U.S. borrowing costs and slow growth. “Lorie is a trusted colleague and dedicated public servant whose remarkable skill and experience with complex financial markets has informed our decisions and helped implement monetary policy to support the U.S. economy,” Fed Chair Jerome Powell said in the statement. Powell has signaled that he and fellow policymakers will likely follow last week’s half-percentage-point interest rate hike with at least two more hikes of the same size at upcoming policy meetings.The aim of the rises in borrowing costs is to slow household demand for goods and services and business demand for workers fast enough to cool price and wage pressures and bring inflation down to the Fed’s 2% target. Fed policymakers hope that can be done without undercutting the strong labor market or sending the economy into a prolonged downturn. As a Fed insider and a markets expert, Logan is a departure from the Dallas Fed’s last two presidents, both of whom came from outside the U.S. central bank’s system.Meredith (NYSE:MDP) Black has run the Dallas Fed on an interim basis since October after Kaplan, along with Boston Fed President Eric Rosengren, retired before their terms were out. They stepped down amid revelations of personal trading even as the Fed was buying trillions of dollars of assets to stabilize markets, lifting the prices of the kinds of securities that both men were trading.Four other Fed banks also have women leaders, including incoming Boston Fed President Susan Collins, currently provost of the University of Michigan. She will be the first Black woman to serve as a Fed bank chief when she starts on July 1. U.S. Senator Bob Menendez and fellow lawmaker Raul Ruiz, a U.S. representative, said they were disappointed the Dallas Fed board did not pick what could have been the Fed’s first Latino policymaker. “It missed an opportunity,” they wrote. More