Economy

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Kevin Warsh
Jin Lee | Bloomberg | Getty Images

President-elect Donald Trump is considering naming Kevin Warsh as Treasury secretary then ultimately sending him off to serve as Federal Reserve chair, according to a Wall Street Journal report.
A former Fed governor himself, Warsh would move over to the central bank after current Chair Jerome Powell’s term expires in 2026, according to the Journal, which cited sources familiar with Trump’s thinking.

The speculation comes with Treasury being the last major Cabinet position for which Trump has yet to state his intention.
Various reports have put Warsh as one of the finalists with Apollo Global Management CEO Marc Rowan and hedge fund manager Scott Bessent. Among the potential scenarios would be one where Bessent would lead the National Economic Council initially then go over to Treasury after Warsh takes over at the Fed.
However, Trump is known for the propensity to change his mind, and the report noted that nothing has been finalized.
Read the full Wall Street Journal story here. More

The Eurozone has experienced a downturn in business activity in November, with both the services and manufacturing sectors contracting. The HCOB Flash Eurozone Composite PMI Output Index, which is a measure of the overall health of the economy, fell to 48.1, marking a 10-month low and indicating contraction. This figure was down from October’s reading of 50.0, which signals no change in activity levels. The services sector, which had been expanding, joined manufacturing in contraction, with its PMI Business Activity Index dropping to 49.2 from 51.6 in October, also reaching a 10-month low.Manufacturing continued to struggle, with the Manufacturing PMI Output Index decreasing to 45.1, a slight decline from 45.8 in October, and the overall Manufacturing PMI falling to 45.2 from 46.0, both reaching a two-month low. The data, collected between November 12 and November 20, reflects the second contraction in three months for the Eurozone.The decline in output is attributed to diminishing demand, as new orders have decreased for the sixth consecutive month, and at the fastest rate in 2024. This reduction was more pronounced in manufacturing, but the services sector also saw a significant drop in new business. The decline in new business from abroad, including intra-Eurozone trade, was the largest since the end of last year, with new export orders decreasing sharply.Confidence in the future of the Eurozone economy has also waned, with business sentiment falling to its lowest level since September 2023. The drop in optimism was most notable in the service sector, where it reached a two-year low. In France, pessimism was recorded for the first time in over four years, while German companies showed a slight improvement in confidence compared to October. Nonetheless, the rest of the Eurozone maintained a strong positive outlook for the coming year, despite a slight decrease in optimism.Employment across the Eurozone was marginally reduced for the fourth month in a row, with a marked decrease in manufacturing jobs, the most significant since August 2020. In contrast, the services sector saw an increase in employment, the fastest in four months. Germany reported a fall in staffing levels, while France and the rest of the Eurozone saw an increase.Prices in the Eurozone have continued to rise, with input cost inflation accelerating to a three-month high in November, although it remains below the average for the year. Services input prices have surged, counterbalanced by a reduction in manufacturing input costs. Output prices also increased at a faster rate than in October but were still below the average for the year. Germany, France, and the rest of the Eurozone all reported increases in output prices.Inventories and supply chains were also affected, with manufacturing firms reducing their purchasing activity at the fastest rate in 2024. Stocks of purchases and finished goods were lowered more than in the previous month, and suppliers’ delivery times remained broadly stable.Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on the situation, noting the challenges faced by the Eurozone’s economy amidst political uncertainties in France and Germany, as well as the impact of the U.S. presidential election. He highlighted the unexpected drop in the services sector and the stagflationary environment, with declining activity and rising prices. De la Rubia also mentioned the possibility of a rate pause by the European Central Bank (ECB) in December, although a 25-basis point rate cut is more likely to be supported by the majority.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Schlegel stressed keeping inflation within a range of 0-2% – which the central bank calls price stability – as a key factor for the Swiss economy’s strong performance in recent years.After a post-pandemic spike, inflation has returned to the target range over the last 17 months, and fell to its lowest level in more than three years in October.The downward trend has stoked market expectations of more interest rate cuts by the SNB this year and into 2025 to head off deflationary risks.”The Swiss economy has performed well by international comparison,” Schlegel told an event in Zurich. “The SNB has contributed to this performance by maintaining price stability despite significant deflationary and inflationary risks,” he said. “Going forward, the SNB will continue to contribute to favourable economic conditions in Switzerland by ensuring price stability.”The comments echo Jordan’s consistent messaging on inflation during his 12-year stint in charge.Schlegel, who began his career at the SNB in 2003 and worked as a researcher for Jordan, was widely seen as the bank’s continuity candidate.He said the SNB needed a flexible inflation target due to Switzerland being strongly affected by global economic trends. He also noted it has a safe-haven currency, which tended to appreciate during downturns.Schlegel said the SNB’s main tools were its policy interest rate, as well as currency market interventions.The SNB’s target range allowed the central bank to respond flexibly to shocks and decide how to act, Schlegel said. More