Economy

The $15 billion rapid-delivery start-up decided to do business differently from rivals like Instacart. A changing environment is testing its model.From its beginning in 2013, Gopuff aimed to do rapid delivery differently.The start-up’s founders, Yakir Gola and Rafael Ilishayev, based the company in Philadelphia, away from other delivery ventures in Silicon Valley and New York. They opened warehouses and bought their own merchandise, instead of acting as middlemen who connected retailers and restaurants with customers. And they promised speed, delivering food and other items in 30 minutes or less.By late last year, Gopuff had amassed $3.4 billion in funding, bought the alcohol and beverage retailer BevMo! and was valued at $15 billion. This year, it appeared poised to go public.“We built a sustainable business that thrives and that is set up to win long term,” Mr. Gola, 29, said in an interview last month. Gopuff, he added, is “a disrupter.”Now the question is whether Gopuff has done delivery differently enough. In the past few months, the start-up environment has changed from boom to uncertainty, as tech stocks have cratered, inflation has risen, interest rates have increased and the economic outlook has darkened.In response, Gopuff recently put off its public listing and is trying to raise $1 billion in debt that could potentially be turned into stock. The unprofitable company also lowered its drivers’ minimum pay in California. This year, it has done two rounds of job cuts, including last month when it laid off about 450 people, or 3 percent of its 15,000 workers.Gopuff faces a dismal history of failed delivery start-ups, from Webvan and Kozmo.com in the early 2000s to Buyk, 1520 and Fridge No More in the past few months. Delivery — with high labor and transportation costs, stiff competition and lofty marketing expenses — is notoriously expensive and logistically complicated to provide and make money on.While delivery companies such as DoorDash and Grubhub have gone public, many of them lose money, and some have later been acquired. And with the bump in pandemic orders tailing off, many of these companies are hitting hurdles. Last month, the grocery delivery start-up Instacart cut its valuation to about $24 billion from $39 billion.“These companies are fine during a very ebullient and frothy capital markets environment,” said Ken Smythe, the chief executive of Next Round Capital Partners, which advises investors buying and selling stakes in start-ups. “The world has changed significantly in the past 60 days.”Gopuff’s delivery people are gig workers. The business also has warehouses where its workers are full-time employees.Gabby Jones for The New York TimesIn the interview, Mr. Gola acknowledged that delivery was “very logistically complex — it takes a lot of time and a lot of effort and capital.” But having warehouses and inventory is the only way to profit over time, he said, because it allows the company to make money from selling goods and not just charging delivery fees.“Once you can execute, and obviously that’s hard, it wins in the long term,” he said.Gopuff added that it was putting a public offering on the back burner because the stock market had been volatile and it had enough cash on hand. The layoffs were part of a global restructuring, it said.Mr. Gola and Mr. Ilishayev met as students at Drexel University in Philadelphia in 2011. In their sophomore year, they founded Gopuff for college students, offering fast late-night deliveries of junk food, condoms and smoking paraphernalia. They called themselves a “one-stop puff shop,” which led to the name Gopuff. Deliveries were available until 4:20 a.m.To set themselves apart from DoorDash and Instacart, which connect customers to restaurants and grocery stores via their apps and rely on gig workers, Mr. Gola and Mr. Ilishayev decided Gopuff would buy goods from distributors and wholesalers and have warehouses. Its warehouse workers would be full-time employees, though its delivery drivers and bike messengers would be contractors.Mr. Gola, who dropped out of college, and Mr. Ilishayev, who graduated from Drexel with a degree in legal studies, became co-chief executives of Gobrands, Gopuff’s parent company. To fund the business, they sold used office furniture on Craigslist and eBay. They also offered discounts on orders to attract customers and charged just $2.95 for delivery.As Gopuff gained traction beyond Drexel students, Mr. Gola and Mr. Ilishayev expanded their product offerings and set up warehouses in Boston, Washington and Austin, Texas. Starting in 2016, the company raised money from venture firms such as Anthos Capital and, later, investors including the Japanese conglomerate SoftBank.“We saw it in the data: customers coming back multiple times every month, very strong customer retention, customers who would stick around forever, basically,” said Jett Fein, a partner at Headline, a venture capital firm that invested in Gopuff.In 2020, the pandemic sent Gopuff’s business into overdrive as people shied away from shopping in person and relied on deliveries. Billions of dollars in new venture capital flooded in.Mr. Gola and Mr. Ilishayev went on a spending spree. That November, Gopuff acquired the California retailer BevMo! for $350 million, giving it a foothold in the state as well as the chain’s liquor licenses. In Europe, it bought the delivery start-ups Fancy and Dija.The company also started offering a $5.95 monthly subscription for delivery and began an advertising business.Gopuff now has nearly 700 warehouses that deliver to 1,200 cities in North America and Europe. It also has several retail locations in New York, Texas and Florida, where customers can walk in and shop.But profits have been elusive. The start-up is not cash-flow positive, which means it is spending more money than it is taking in, said Scott Minerd, the chief investment officer of Guggenheim Investments, which has invested in Gopuff. He added that the company had paused some plans to open new warehouses.Gopuff spends more on property and salaries of warehouse workers than its rivals, said John Mercer, head of global research at the firm Coresight Research. Discounts to attract customers have also eaten into revenue.Gopuff said it made money in its first three years. Its 2020 revenue was $340 million, according to a company document for potential landlords that was obtained by The New York Times. The document also showed that Gopuff’s cash balance dropped $111 million that year to $521 million.Revenue totaled $2 billion last year, Gopuff said. The company also lost $500 million, which was first reported by Axios.Some of its spending has gone toward handling delivery issues, said four former warehouse and district managers, three of whom declined to be identified because of severance agreements with the company. Several said they had sometimes spent hundreds or thousands of dollars a day on Instacart or at grocery stores to replenish Gopuff’s “never out of stock” staples like bacon, eggs and milk.At other times, suppliers sent pallets of items like ice cream that were not needed and could not be stored.“I would throw away $1,000, $2,000, $3,000 in inventory as soon as I received it because I had nowhere to put it,” said Anthony Nelson, who managed two Gopuff warehouses in Houston from 2019 through 2021. “That happened at least once or twice a week at bare minimum.”Mr. Gola said Gopuff bought items from Instacart or local retailers less than 1 percent of the time and threw out less inventory than the industry standard.The start-up has also faced questions over its use of gig workers, many of whom sign up for shifts with the company and report to managers. In 2018, the Labor Department found that Gopuff had misclassified delivery drivers in Pennsylvania as independent contractors.“Gopuff’s entire business model depends on flagrant misclassification of a kind that’s shocking well beyond what we see even from other gig companies,” said David Seligman, a lawyer who filed a 2017 class-action lawsuit claiming Gopuff wrongly categorized its drivers as contractors. The suit was settled in 2019.In November, hundreds of Gopuff gig workers went on strike, said Candace Hinson, a delivery driver in Philadelphia who helped organize the stoppage.Mr. Gola said the company used gig workers as drivers, rather than hiring employees, because “that’s what they want.” The company disputed that hundreds had gone on strike and said the workers’ action had not hurt its business.In the interview, Mr. Gola insisted that Gopuff would be the company to crack the instant delivery code.“The world is moving toward instant,” he said, “and Gopuff is at the forefront of that.” More

The administration’s economic advisers see climate change and other factors complicating global trade patterns for years to come.The coronavirus pandemic and its ripple effects have snarled supply chains around the world, contributing to shipping backlogs, product shortages and the fastest inflation in decades.But in a report released Thursday, White House economists argue that while the pandemic exposed vulnerabilities in the supply chain, it didn’t create them — and they warned that the problems won’t go away when the pandemic ends.“Though modern supply chains have driven down consumer prices for many goods, they can also easily break,” the Council of Economic Advisers wrote. Climate change, and the increasing frequency of natural disasters that comes with it, will make future disruptions inevitable, the group said.White House economists analyzed the supply chain as part of the Economic Report of the President. The annual document, which this year runs more than 400 pages, typically offers few new policy proposals, but it outlines the administration’s thinking on key economic issues facing the country, and on how the president hopes to address them.This year’s report focuses on the role of government in the economy, and calls for the government to do more to combat slowing productivity growth, declining labor force participation, rising inequality and other trends that long predated the pandemic.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.“The U.S. is among and remains one of the strongest economies in the world, but if we look at trends over the last several decades, some of those trends threaten to undermine that standing,” Cecilia Rouse, chair of the Council of Economic Advisers, said in an interview. The problem is in part that “the public sector has retreated from its role.”The report dedicates one of its seven chapters to supply chains, noting that the once-esoteric subject “entered dinner-table conversations” in 2021. In recent decades, Ms. Rouse and the report’s other authors write, U.S. manufacturers have increasingly relied on parts produced in low-cost countries, especially China, a practice known as offshoring. At the same time, companies have adopted just-in-time production strategies that minimize the parts and materials they keep in inventory.The result, the authors argue, are supply chains that are efficient but brittle — vulnerable to breaking down in the face of a pandemic, a war or a natural disaster.“Because of outsourcing, offshoring and insufficient investment in resilience, many supply chains have become complex and fragile,” they write, adding: “This evolution has also been driven by shortsighted assumptions about cost reduction that have ignored important costs that are hard to turn into financial measures, or that spilled over to affect others.”But some economists noted that making supply chains more resilient could carry its own costs, making products more expensive when inflation is already a major concern.Adam S. Posen, the president of the Peterson Institute for International Economics in Washington, said the pandemic and Russia’s invasion of Ukraine might lead companies to locate at least some of their supply chains in places that were more politically stable and less strategically vulnerable. But pushing companies to duplicate production could waste taxpayer dollars and introduce inefficiencies, raising prices for consumers and lowering growth.“At best you’re paying an insurance premium,” he said. “At worst you’re doing something for completely political reasons that’s very economically inefficient.”Other economists have emphasized that global supply chains are not always a source of fragility — sometimes they can be a source of resilience, too.Inflation F.A.Q.Card 1 of 6What is inflation? More

The Justice Department is using antitrust law to charge employers with colluding to hold down wages. The move adds to a barrage of civil challenges.Antitrust suits have long been part of the federal government’s arsenal to keep corporations from colluding or combining in ways that raise prices and hurt the consumer. Now the government is deploying the same weapon in another cause: protecting workers’ pay.In a first, the Justice Department has brought a series of criminal cases against employers for colluding to suppress wages. The push started in December 2020, under the Trump administration, with an indictment accusing a staffing agency in the Dallas-Fort Worth area of agreeing with rivals to suppress the pay of physical therapists. The department has now filed six criminal cases under the pillar of antitrust law, the Sherman Act, including prosecutions of employers of home health aides, nurses and aerospace engineers.“Labor market collusion dots the entirety of the U.S. economy,” said Doha Mekki, principal deputy assistant attorney general in the department’s antitrust division. “We’ve seen it in sectors across the board.”If the courts are swayed by the government’s arguments, they could drastically alter the relationship between workers and their employers across large swaths of the economy.“The expansion of Sherman Act criminal violations changes the ballgame when it comes to how companies engage with their workers,” noted an analysis by lawyers at White & Case, including J. Mark Gidley, chair of the firm’s global antitrust and competition practice. “Executives and managers could face jail time for proven horizontal wage-fixing conspiracies.” In addition to fines for corporations or individuals, the Sherman Act provides for prison terms of up to 10 years.The Biden administration is also deploying antitrust law in civil cases to shore up workers’ pay. And in another first, the Justice Department filed a lawsuit in November to stop Penguin Random House’s attempt to buy Simon & Schuster on the grounds that the resulting publishing Goliath would have the power to depress advances and royalty payments to authors.The move to block the publishers’ merger “declines to even allege the historically key antitrust harm — increased prices,” the White & Case lawyers argued. It is “emblematic of the Biden administration’s and the new populist antitrust movement’s push to direct the purpose of antitrust away from consumer welfare price effects and towards other social harms.”And yet the Justice Department’s push builds on a rationale for criminal antitrust enforcement articulated since the Obama administration. “Colluding to fix wages is no different than colluding to suppress the prices of auto parts or homes sold at auction,” said Renata Hesse, acting assistant attorney general for antitrust, in November 2016. “Naked wage-fixing or no-poach agreements eliminate competition in the same irredeemable way as per se unlawful price-fixing and customer-allocation agreements do.”The Biden administration has picked up the argument with a vengeance. Last summer, President Biden issued an executive order mandating a “whole of government” effort to promote competition across the economy. Last month, the Treasury Department issued a report on just how anticompetitive labor markets have become.Corporate America is alarmed. “In their minds, everything is an antitrust issue,” said Sean Heather, senior vice president for antitrust at the U.S. Chamber of Commerce. “There is a role for antitrust in labor markets,” he added. “But it is a limited one.”The State of Jobs in the United StatesJob openings and the number of workers voluntarily leaving their positions in the United States remained near record levels in March.March Jobs Report: U.S. employers added 431,000 jobs and the unemployment rate fell to 3.6 percent ​​in the third month of 2022.A Strong Job Market: Data from the Labor Department showed that job openings remained near record levels in February.New Career Paths: For some, the Covid-19 crisis presented an opportunity to change course. Here is how these six people pivoted professionally.Return to the Office: Many companies are loosening Covid safety rules, leaving people to navigate social distancing on their own. Some workers are concerned.The latest criminal indictment, brought in January against owners and managers of four home health care agencies in Portland, Maine, is emblematic of the new approach.According to the indictment, the agencies agreed to keep the wage of health aides at $16 to $17 an hour. They encouraged other agencies to sign on, prosecutors said, and threatened an agency that raised its pay to between $17 and $18.50.The agencies’ margin is essentially the difference between the wage and the reimbursement from the Maine Department of Health and Human Services. In April 2020, the department raised the rate to $26.20 an hour, from $20.52, explicitly to “fund pay raises for approximately 20,000 workers,” according to the indictment.The agencies’ agreement, the indictment said, was “a per se unlawful, and thus unreasonable, restraint of interstate trade and commerce in violation of Section l of the Sherman Act.”That blows directly against the position of the Chamber of Commerce. Last April, it filed a brief in a similar case, opposing the government’s argument against an outpatient medical care facility that agreed with a rival not to solicit each other’s employees. The Justice Department was overstepping, the brief argued, because the company couldn’t know the behavior was “per se” illegal — an outright breach of the law irrespective of its effects — since the government’s argument had not been tested in court.American companies “are entitled to fair notice of what conduct is and is not prohibited by the federal antitrust laws,” it argued. “Because no court has previously held that nonsolicitation agreements are per se illegal, this prosecution falls far short of the fair notice that due process requires.”A federal court in a separate case has since sided with the government’s interpretation. In November, Judge Amos L. Mazzant III of the United States District Court in the Eastern District of Texas denied a motion to dismiss a federal criminal indictment alleging wage-fixing at a staffing company providing physical therapists, agreeing that price fixing would be “per se” illegal and that the defendants had fair warning that their behavior was against the law.But beyond the legal wrangling brought about by the Justice Department’s new approach, there are striking examples of efforts by employers to suppress wages.“I suspect those things are all over the place,” said Ioana Marinescu, an economist at the University of Pennsylvania’s School of Social Policy and Practice, whether it is employers hoarding highly paid computer engineers or chicken plants paying $15 an hour. “The benefits of collusion may not be super large, but if the costs are quite low, why not do it if you can extract profit?”Until recently, over half of all franchise agreements in the United States, at companies including McDonald’s, Jiffy Lube and H&R Block, included provisions barring franchisees from hiring one another’s workers, according to research by the economists Alan B. Krueger and Orley Ashenfelter. Economic analysis has found that suppressing competition for workers, reducing their options, generally means lower wages. After challenges from several state attorneys general, hundreds of companies abandoned the practice.Another study found that 18 percent of workers are under contracts that forbid moving to a competitor. Most are highly skilled and well paid. Employers who invest in their training can plausibly argue that the noncompete clauses protect their investment and prevent workers from taking valuable information to a rival.But such provisions cover 14 percent of less-educated workers and 13 percent of low-wage workers, who receive little or no training and hold no trade secrets. Several states have challenged the provisions in court. Some, including California, Oklahoma and North Dakota, have prohibited their enforcement.Then there is the litigation. There are civil cases from the 1990s: one by the Justice Department against the Utah Society for Healthcare Human Resources Administration and several hospitals in the state that shared wage information about registered nurses and matched one another’s wages, keeping their pay low. Lawsuits filed by nurses in 2006 accusing hospital systems of conspiring to suppress their wages led to multimillion-dollar settlements in Albany and Detroit.In 2007, the Justice Department sued the Arizona Hospital and Healthcare Association for fixing the rates that hospitals paid to nursing agencies for their temporary nurses, putting a cap on their wages. In settling the case, the association agreed to abandon the practice.The pace picked up after a Justice Department lawsuit in 2010 taking aim at no-poaching agreements involving Adobe, Apple, Google, Intel, Intuit, Pixar and later Lucasfilm. The companies settled the case without admitting guilt or paying fines, but Adobe, Apple, Google and Intel paid $415 million to settle a subsequent class-action lawsuit.Since then, lawsuits have been filed across the industrial landscape. Pixar, Disney and Lucasfilm paid $100 million to settle an antitrust challenge to their agreements not to hire one another’s animation engineers. In 2019, 15 “cultural exchange” sponsors designated by the State Department paid $65.5 million to settle a lawsuit claiming, among other things, that they colluded to depress the wages of tens of thousands of au pairs on J-1 visas. Since 2019 Duke University and the University of North Carolina have paid nearly $75 million to settle two antitrust cases over agreements not to recruit each other’s faculty members.This month, Local 32BJ of the Service Employees International Union filed a complaint with the Federal Trade Commission arguing that Planned Companies, one of the largest building services contractors in the Northeast and Mid-Atlantic, illegally forbids its clients to hire its janitors, concierges or security guards either directly or through another firm — locking its workers in.In perhaps the biggest case of all, in 2019 a class action was filed against the American chicken industry, growing to cover some 20 producers responsible for about 90 percent of the poultry market. The complaint accused them of exchanging detailed wage information to fix the wages of about a quarter-million employees, including hourly workers deboning chickens, refrigeration technicians and feed-mill supervisors on a salary.Four of the chicken processors have settled, agreeing to pay tens of millions of dollars. In February, Webber, Meng, Sahl & Company, one of two firms that collected wage data for the poultry companies, settled as well, offering a fairly clear window into the industry’s attempts to suppress wages.In a declaration to the court, part of the settlement agreement, the law firm’s president, Jonathan Meng, said the chicken companies had used the firm “as an unwitting tool to conceal their misconduct.” He offered details about how poultry executives would share detailed wage information. “They wanted to know how much and when their competitors were planning to increase salaries and salary ranges,” he said, because it would allow them “to limit and reduce their salary increases and salary range increases.”Most of the defendants, however, are still contesting the case. They have argued that to prove collusion, the plaintiffs must show that wages across the industry moved in tandem, an argument the court has yet to rule on.Another hurdle is convincing judges that chicken industry workers amount to a specific occupation. If workers deboning chickens could easily leave the poultry industry to work for a better wage at McDonald’s or 7-Eleven, they would have a tougher case to prove that anticompetitive practices by poultry processors caused them direct harm.In pursuing such cases, the government is likely to be challenged by corporate groups every step of the way.Mr. Heather at the Chamber of Commerce, for one, argues that “this narrative that lax antitrust is responsible for income inequality” is wrong. He notes a study sponsored by the chamber showing that corporate concentration is no higher than in 2002 and has been declining since 2007. “The heart of the premise is just flawed,” Mr. Heather said.Moreover, Mr. Heather said, labor markets are already covered by labor laws. “The chamber has an objection to the blending of antitrust and workplace regulation,” he said.Mr. Gidley of White & Case broadly agrees. “It is intriguing to us to see the last 40 years of antitrust law thrown out the window,” he said in an interview. “If antitrust is no longer about low prices but about a clean environment and wages and this, that and the other, it loses its compass.” More

VIENNA (Reuters) – Russian President Vladimir Putin told Chancellor Karl Nehammer during their meeting this week that Austria’s supply of gas can continue to be paid for in euros, Nehammer was quoted as saying by Austrian news agency APA.Moscow has warned Europe it risks having gas supplies cut unless it pays in roubles as he seeks retaliation over Western sanctions for Russia’s invasion of Ukraine, which the Kremlin describes as a “special military operation”.Nehammer said he held “very direct, open and tough” talks with Putin near Moscow on Monday about the invasion of Ukraine. But the Austrian leader had not publicly mentioned any discussion of Austria’s security of gas supply.Austria gets 80% of its natural gas from Russia and opposes an immediate European Union gas embargo on Moscow, arguing it is not possible to suddenly switch to alternative suppliers.Putin said “that the gas supply is secured, that Russia will deliver the contractually agreed quantities and that payments can continue to be made in euros”, APA quoted Nehammer as saying in a joint interview on Wednesday with German news agency DPA.The European Commission has said those with contracts requiring payment in euros or dollars should stick to that, which Nehammer has said Austria will do. At the same time, Russia appears to have opened a door to continued payment in euros.Two weeks ago Moscow decreed foreign buyers of Russian gas would have to open rouble accounts in state-run Gazprombank, which is not under the same crippling sanctions as many other Russian banks, or risk being cut off.European gas buyers could therefore deposit payments in euros and let Gazprombank buy roubles on their behalf – a work-around that Austria has said appears to make continued payment in euros possible.Nehammer repeated his opposition to an embargo in Wednesday’s interview, which quoted him as saying it “would mean that both (Austrian) industry and households would suffer serious harm from the non-delivery of that gas”. More

BEIJING (Reuters) – China’s economic growth is likely to slow to 5.0% in 2022 amid renewed COVID-19 outbreaks and a weakening global recovery, a Reuters poll showed, raising pressure on the central bank to ease policy further.The forecast growth for 2022 would be lower than the 5.2% analysts tipped in a Reuters poll in January, suggesting the government faces an uphill battle in hitting this year’s target of around 5.5%. Growth is then forecast to pick up to 5.2% in 2023.Gross domestic product (GDP) likely grew 4.4% in the first quarter from a year earlier, according to the median forecasts of 41 economists polled by Reuters, outpacing the fourth-quarter’s 4.0% due to a solid start in the first two months.Analysts believe March activity could take a blow from China’s efforts to contain its biggest COVID outbreak since the coronavirus was first discovered in the city of Wuhan in late 2019.”March activity data is likely to have seen a notable deterioration, but that would just be the tip of the iceberg as the economically damaging lockdowns only started in mid-March,” analysts at Societe Generale (OTC:SCGLY) said in a note.”However, real GDP growth might avoid falling below 4%, thanks to the infrastructure push, the reporting methods and the surprisingly strong data seen in January and February.”On a quarterly basis, growth is forecast to fall to 0.6% in the first quarter from 1.6% in October-December, the poll showed.The government is due to release first-quarter GDP data, along with March activity data, on April 18, at 0200 GMT.GDP expanded 8.1% in 2021, its best showing in a decade, but momentum cooled markedly over the course of last year, weighed by debt problems in the property market and anti-virus measures that hit consumer confidence and spending.Last year, policymakers focused on curbing property and debt risks, which exacerbated the economic slowdown.MORE EASING ON CARDSThe government has unveiled more fiscal stimulus this year, including stepping up local bond issuance to fund infrastructure projects, and cutting taxes for businesses.China will use timely cuts in banks’ reserve requirement ratios (RRR) and other policy tools to support the economy, the cabinet said on Wednesday, as headwinds increase amid outbreaks of COVID-19.The People’s Bank of China (PBOC) is likely to cut the RRR – the amount of cash that banks must hold as reserves – by 50 basis points (bps) in the second quarter of 2022, according to the poll.Citi economists expect a 50-basis point cut to be announced as early as Friday, releasing over 1.2 trillion yuan ($188.52 billion) in liquidity, they said in a note, adding the move could reduce the chance for an imminent medium-term lending facility rate cut, but the loan prime rate (LPR) could still be trimmed on April 20.Analysts expect the PBOC to cut the one-year LPR, the benchmark lending rate, by 10 basis points in the second quarter, the poll showed.The PBOC last cut the one-year LPR by 10 basis points in January and last cut the RRR by 50 basis points in December.Consumer inflation is expected quicken to 2.2% in 2022 from 0.9% in 2021, before picking up to 2.3% in 2023, the poll showed.(For other stories from the Reuters global long-term economic outlook polls package:)($1 = 6.3653 Chinese yuan) (Polling by Vijayalakshmi Srinivasan, Arsh Mogre, Devayani Sathyan in Bengaluru and Jing Wang in Shanghai; Reporting by Kevin Yao; Editing by Sam Holmes) More

The tweak could come at the central bank’s policy meeting this month, Muguruma wrote in a research note, having initially expected the tweak to be made in July.The projection by Muguruma, a prominent BOJ watcher who has closely tracked its policy for years, comes despite reassurances by Governor Haruhiko Kuroda that the BOJ is in no rush to follow in the footsteps of other central banks in withdrawing stimulus.Under the current guidance, the BOJ says it “won’t hesitate to take additional easing steps,” and expects short- and long-term policy interest rates to “remain at their present or lower levels.”The central bank will likely change the guidance to say it will “maintain short- and long-term rates at current levels for the time being,” Muguruma said.The tweak could help slow the pace of yen declines by making the BOJ’s policy outlook appear somewhat less dovish than before, she said.”With the yen sliding to 20-year lows against the dollar, there’s no need to stick to a guidance that eyes a possible deepening of negative interest rates,” Muguruma said.Under a policy dubbed yield curve control, the BOJ pledges to guide short-term rates at -0.1% and cap the 10-year bond yield around 0% to support growth through low borrowing costs.With inflation still subdued and the economy weak, the BOJ has repeatedly said it will keep monetary policy ultra-low. The Federal Reserve’s aggressive rate hike plans has widened the interest rate differential, pushing the yen to a two-decade low against the dollar.The BOJ next meets for a policy meeting on April 27-28. More

BEIJING (Reuters) – China’s commerce ministry hopes the United States will remove tariffs on Chinese goods and stop cracking down on Chinese firms as soon as possible, ministry spokersperson Shu Jueting told regular news conference on Thursday.A stable and healthy bilateral trade relations will help stabilize global supply chains and the global economic recovery, Shu said after a U.S.-China Business Council report said China is still an important export destination for the United States. More

BEIJING (Reuters) -China’s explicit call to cut the amount of cash banks set aside as reserves and boost lending has reinforced expectations for imminent policy easing, but economists say any credit loosening may not be enough to beat back the prospect of a deep economic downtrend.Growth in the world’s second-largest economy has slowed since early 2021 as traditional engines of the economy such as real estate and consumption faltered. Exports, the last major growth driver, are also showing signs of fatigue.More recently, widespread disruptions to activity from China’s biggest COVID-19 outbreak since 2020 and tough lockdowns have tilted the odds towards a recession, a few economists say.On Wednesday, the State Council, or cabinet, said after a meeting that monetary policy tools – including cuts in banks’ reserve requirement ratios (RRRs) – should be used in a timely way. In the last two rounds of RRR cuts in 2021, the respective announcements of the easing were made two to three days after they were flagged by the State Council. “We expect the PBOC to deliver a 50-basis point RRR cut and potentially also an interest rate cut in the next few days,” Goldman Sachs (NYSE:GS) wrote in a note on Thursday. Most private forecasters now expect an RRR cut of 50 basis points (bps), which would free up more than 1 trillion yuan ($157 billion) in long-term funds that banks can use to boost lending.A commentary by state-run Securities Times said April 15 would be the window to watch. China on Monday will report March data for industrial production and retail sales, which are expected to reflect the impact from COVID curbs, as well as first-quarter gross domestic product (GDP).But some analysts cast doubt on the effectiveness of an RRR cut now, due to a lack of demand for credit, as factories and businesses struggle while consumers remain cautious in a very uncertain economy. [nL2N2VZ04KTransmission channels for conventional RRR and rate cuts are severely clogged due to the COVID-related lockdowns and logistics disruptions, according to Nomura.”When households scramble to stockpile food and private corporates prioritise survivorship over expansion, credit demand is weak,” Nomura analysts said in a note. “With so many lockdowns, road barricades and property curbs, the most concerning issues lie mainly on the supply side, and merely adding loanable funds and slightly cutting lending rates are unlikely to effectively boost final demand.”Nomura says China is facing a “rising risk of recession”, with as many as 45 cities now implementing either full or partial lockdowns, making up 26.4% of the country’s population and 40.3% of its GDP.It expects one 10-bps rate cut each to the rates of the one-year medium-term lending facility (MLF), one-year and five-year loan prime rates (LPRs), and seven-day reverse repo in the near term. But no change in the one-year MLF rate is expected when the central bank is set to renew 150 billion yuan of such medium-term loans on Friday, said 31 out of 45 traders and analysts in a Reuters poll. Since a flurry of cuts to key rates in January, China has kept its benchmark one-year LPR unchanged at 3.70% and its five-year LPR steady at 4.60%.”Monetary policy is not the panacea for all problems,” the Securities Times commentary said. “Unblocking supply chains and industrial chains, allowing enterprises to get orders, and allowing people to have income would be the only way the cash-flow of the real economy be improved and a turnaround be achieved naturally.” ($1 = 6.3663 Chinese yuan renminbi) More