Economy

WASHINGTON (Reuters) -The U.S. Postal Service said on Thursday it must continue to cut costs and boost revenue or risks requiring a government bailout to help the organization avoid financial collapse.USPS reported on Thursday a net loss of $9.5 billion for its fiscal year ending Sept. 30, a $3-billion bigger loss than last year, largely due to a year-over-year increase in non-cash workers’ compensation expense. Total (EPA:TTEF) operating revenue was $79.5 billion, up 1.7%.”If we do nothing more, we remain on the path to either a government bailout or the end of this great organization as we know it,” the Postal Service said in its revised restructuring plan issued on Thursday, adding it was facing a “still-precarious financial condition.”USPS has lost more than $100 billion since 2007.USPS is implementing a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade. USPS now projects $80 billion in losses over the period and plans further cuts to address the shortfall.At a board meeting on Thursday, Postmaster General Louis DeJoy expressed optimism about the plan for a “financially sustainable, competitive and service-excellent driven future.” First-class mail volume continues to fall, dropping 3.6% year-over-year to 44.3 billion pieces. First-class mail use is down 80% since 1997 and is at its lowest level since 1968.USPS, which had vowed to break even in 2023 but abandoned that timetable, said despite cutting costs it does not plan to reduce its nationwide network of 31,000 retail locations.In September, USPS said it would not hike stamp prices in January for the first time in two years. USPS in July raised the price of a first-class mail stamp to 73 cents from 68 cents and increased overall mailing services product prices by 7.8%.Stamp prices are up 36% since early 2019 when they were 50 cents.In 2022, President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade. Congress separately gave USPS a $10-billion pandemic expenses loan that it later forgave. More

Powell, asked at an event in Dallas whether he would consider being the first Fed chair in more than seven decades to remain on the Fed board after no longer serving as its leader, said only that he is committed to serving out his term as chair.”I’ll certainly serve to the end … of my chair term,” Powell said. “And that’s really all I’ve decided, and all I’m thinking about.”Powell’s term as a Board of Governors member expires in January 2028. The last former Fed chair to continue serving beyond their term as its leader was Marriner Eccles, who ceased being the Fed’s leader in January 1948, but continued on the board until July 1951.The question follows a suggestion by one individual under consideration for a leading economic role in Donald Trump’s incoming administration that the next president nominate and the Senate confirm a successor to Powell long before the current central bank chief’s term expires. The idea, floated last month by Scott Bessent, whom Trump is considering for Treasury secretary, would be to weaken Powell’s authority for the remainder of his tenure while an already-approved successor advocated in the wings for monetary policy more palatable to Trump.“You could do the earliest Fed nomination and create a shadow Fed chair,” Bessent told Barron’s. “And based on the concept of forward guidance, no one is really going to care what Jerome Powell has to say anymore.”Bessent later told the Wall Street Journal he no longer thought the idea was worth pursuing.Nonetheless, Trump’s propensity for flouting norms and his open criticism of Powell, whom he appointed chair during his first term as president, has the Fed-watching world on high alert for more challenges to the U.S. central bank’s independence after Trump becomes president for a second time in January.Presidents typically do not wait for the current chair’s term to expire before nominating a successor or renominating the incumbent, but the window is normally on the order of three to four months, a period largely consumed by the Senate confirmation process and not one that would allow the nominee to usurp authority from a current Fed chief. Trump, for instance, nominated Powell, then a Fed governor, to take over as chair from Janet Yellen in November 2017, about three months before her term as chair was due to expire. President Joe Biden did the same in renominating Powell in November 2021.The next Fed vacancy available for Trump to fill is the board seat held by Adriana Kugler, who was appointed by Biden and started at the Fed in September 2023. Her seat expires in January 2026.On Thursday, she devoted a substantial portion of a speech she delivered in Uruguay to the subject of Fed independence.”It has been widely recognized – and is a finding of economic research – that central bank independence is fundamental to achieving good policy and good economic outcomes,” Kugler said. Asked about Kugler’s remarks at the beginning of his event in Dallas, Powell echoed her sentiment, adding that Fed independence is widely embraced by both parties in Congress. More

LONDON (Reuters) -Finance minister Rachel Reeves on Thursday promised a reboot of regulation governing Britain’s “crown jewel” financial industry, which she said has shackled the City’s prospects since the global financial crisis and stifled British economic growth.In a speech at the City of London’s ornate Mansion House, Reeves vowed not to take Britain’s status as a global financial centre for granted and pledged a raft of growth-focused reforms.Her speech came as leaders across the industry brace for a possible bonfire of regulation on Wall Street during President-elect Donald Trump’s second term in office, with leaner taxes and lighter rules on capital likely to widen an earnings gap between U.S. banks and their global competitors.”While it was right that successive governments made regulatory changes after the global financial crisis, to ensure that regulation kept pace with the global economy of the time, it’s important we learn the lessons of the past,” Reeves said. “These changes have resulted in a system which sought to eliminate risk taking. That has gone too far and, in places, it has had unintended consequences which we must now address.” The former Bank of England economist proposed five areas to maximise growth in British financial services: capital markets, fintech, sustainable finance, asset management and wholesale services, and insurance and reinsurance.Reeves said the government would publish a financial services strategy early next year as part of a broader 10-year industrial plan.”The UK has been regulating for risk, but not regulating for growth,” the chancellor said, announcing that she had written to the Bank of England and Britain’s Financial Conduct Authority to instruct them to put greater effort towards supporting government growth goals as well as financial stability.BoE Governor Andrew Bailey, speaking immediately after Reeves, did not address her criticism of regulators but welcomed the government’s focus on growth and recommended rebuilding trade ties with the European Union.Reeves and Prime Minister Keir Starmer promised voters in July’s election that they would turn Britain into the fastest-growing Group of Seven economy after years of sluggishness.Her latest proposals were broadly backed by financiers.”It’s crucial the UK’s regulatory framework is effective and well-calibrated. We therefore welcome the chancellor’s recognition of the need for a more balanced approach to risk,” said Patrick Thomson, EMEA CEO of J.P. Morgan Asset Management and chair of Britain’s Investment Association trade body.But campaign group Positive Money said Reeves appeared to have caved in to lobbyists.”Financial deregulation has a habit of ending in tears,” said Simon Youel, Positive Money’s head of policy and advocacy.INNOVATIONBesides rebalancing rules that curb risk, the government is also exploring ways to help finance firms reduce costs linked to supervising less senior managers.Further action is being taken to jumpstart Britain’s capital markets, with a commitment to establish by May 2025 a regulated market known as PISCES for trading private company shares in a tax-efficient manner.This pledge to boost investment in capital-starved British firms complements plans outlined on Wednesday to build a slew of “megafunds” in what the government said was the biggest shake-up in British pensions seen in decades.Reeves wants to consolidate about 60 public-sector defined contribution pension schemes and 86 local government pension schemes into eight structures large enough to bankroll ambitious infrastructure projects and undersupported growth firms.Britain’s finance ministry also launched a consultation into encouraging more than 1,000 private-sector defined contribution pension schemes to merge, pointing to evidence a minimum size of 50 billion pounds ($63 billion) would boost their investment capability in infrastructure and private equity.A collapse in allocations to domestic assets among Britain’s pension funds – forecast to hold 1.3 trillion pounds in assets by the end of the decade – is seen as one possible factor behind lacklustre economic growth.Britain will also pilot a “digital” government bond, or gilt, that uses distributed ledger technology, Reeves said.Mindful of its manifesto commitments to make Britain the global hub for green finance, Reeves said the government would join forces with the City of London Corporation, the governing body for London’s financial district, to launch a transition finance council. The Treasury will also publish draft legislation for tighter regulation of environmental, social and governance ratings providers and a consultation on the value case for a UK Green Taxonomy to boost investor confidence in sustainable companies.The chancellor also committed to consult on economically significant companies disclosing information using future UK Sustainability Reporting Standards. Tackling one of the finance sector’s greatest scourges, Reeves said she and the interior and science ministers had set tech and telecommunication firms a deadline of March 2025 to show how they are reducing fraud on their platforms.($1 = 0.7895 pounds) More

WASHINGTON (Reuters) -No major U.S. trading partner manipulated its currency in the year to June 30, the Treasury Department said on Thursday in the Biden administration’s final semi-annual currency report before turning over policing of foreign exchange practices to President-elect Donald Trump.Trump, who has frequently complained that the strong dollar is eroding U.S. trade competitiveness, ended his first term in the White House with Treasury declarations of Vietnam and Switzerland as currency manipulators in December 2020 over their market interventions to weaken the value of their currencies.Trump also directed then-Treasury Secretary Steven Mnuchin to label China a currency manipulator in August 2019, a move made at the height of U.S.-China trade tensions. The Treasury Department dropped the designation in January 2020 as Chinese officials arrived in Washington to sign a trade deal with the U.S. For much of the past four years, however, foreign exchange interventions by U.S. trading partners have moved in the opposite direction, to push up the values of their currencies against the dollar, mainly to fight inflation.President Joe Biden’s term will end with the Treasury Department having made no manipulation declarations, but frequently raising concerns about China’s foreign exchange practices in its semi-annual currency reports.The department’s latest analysis found that for the four quarters ended June 30, no major U.S. trading partners met all three criteria for “enhanced analysis” of their currency practices. That process leads to intensive consultations and can ultimately produce trade sanctions. The Treasury Department said China, Japan, South Korea, Taiwan, Singapore, Vietnam and Germany were on its “monitoring list” for extra foreign exchange scrutiny. Malaysia, which was on the previous report’s list, dropped off, while South Korea was added due to its large global current account surplus and its sizable goods and services trade deficit with the U.S.Countries that meet two of the criteria – a trade surplus with the U.S. of at least $15 billion, a global account surplus above 3% of GDP, and persistent, one-way net foreign exchange purchases – are automatically added to the list.CHINA DISCREPANCIESChina was kept on the monitoring list because of its large trade surplus with the U.S. and because of a lack of transparency surrounding its foreign exchange policies, the Treasury Department said.The report noted that despite a slight decline in China’s current account balance to 1.2% of GDP, its export volumes had risen sharply, indicating a decline in export prices. It said that trend continued beyond the monitoring period to the third quarter of 2024.”Partially as a result of weak domestic demand, China has increasingly relied on foreign demand to drive growth this year, with net exports contributing an unusually high share (43%) of real growth in the third quarter,” the report said. “Thus, while the reported current account surplus is not material, the rapidly growing export volumes amid falling prices will likely have large impacts on China’s trading partners.”The report also reiterated a call for more transparency in China’s foreign exchange practices, including use of a daily fix to prevent weakening of the yuan without official explanation. It said these policies “make China an outlier among major economies and warrant Treasury’s close monitoring.”Trump has vowed to impose tariffs of at least 60% on imported Chinese goods, regardless of Beijing’s currency practices, and wants a 10%-20% duty on imports from the rest of the world.The currency report said Japan was kept on the monitoring list because of its $65 billion trade surplus with the U.S. during the review period as well as an increase in its global current account surplus to 4.2% of GDP from 2% a year earlier.The Treasury Department said Japan’s Ministry of Finance had intervened three times since April to shore up the yen’s value: on April 29, May 1 and July 11-12. It noted that Japan’s actions were transparent, but reiterated that intervention “should be reserved only for very exceptional circumstances without prior consultations. More

Standard DigitalStandard & FT Weekend Printwasnow $29 per 3 monthsThe new FT Digital Edition: today’s FT, cover to cover on any device. This subscription does not include access to ft.com or the FT App.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

A strong economy is giving Federal Reserve officials room to move “carefully” as they lower interest rates, the central bank chair said.Jerome H. Powell, the chair of the Federal Reserve, said that a solid economy with low unemployment, robust consumer spending and strengthening business investment gave the central bank room to take its time in cutting interest rates.“The economy is not sending any signals that we need to be in a hurry to lower rates,” Mr. Powell said during a speech in Dallas on Thursday. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”The Fed is trying to navigate a complicated moment. The economy remains healthy overall, but the job market has slowed over the past year. Inflation has also been cooling steadily. Between the two developments, central bankers have decided that they no longer need to tap the brakes on the economy quite so hard.After lifting interest rates sharply in 2022 and 2023 in a bid to cool the economy and wrestle rapid inflation back under control, they have begun to lower borrowing costs in recent months.But officials still want to make sure that they fully stamp out rapid inflation. Price increases have cooled substantially from their 2022 peak, but they have not completely returned to the central bank’s 2 percent goal. Prices climbed 2.1 percent in the year through September, and are on track to come in a bit above that in October, based on other recent data reports.Mr. Powell made it clear that Fed officials expected to see limited progress on inflation in the next few months.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

Standard DigitalStandard & FT Weekend Printwasnow $29 per 3 monthsThe new FT Digital Edition: today’s FT, cover to cover on any device. This subscription does not include access to ft.com or the FT App.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More