Economy

The Federal Trade Commission was deemed to lack the authority to bar companies from restricting their employees’ ability to go to work for rivals.A federal judge on Tuesday upheld a challenge to the Federal Trade Commission’s ban on noncompete agreements, blocking it from taking effect in September as scheduled.Judge Ada Brown of U.S. District Court for the Northern District of Texas ruled that the antitrust agency lacked authority to issue substantive rules related to unfair methods of competition, including the noncompete rule, which would have prohibited companies from restricting their employees’ ability to work for rivals.The push to adopt the rule is part of the Biden administration’s effort to crack down on practices that regulators argue are anticompetitive, unfairly constraining workers.Judge Brown had temporarily blocked the ban in July. Her decision on Tuesday renders that injunction permanent, and nationwide in scope.Banning noncompete agreements would increase workers’ earnings by at least $400 billion over the next decade, the F.T.C. has estimated. The agreements affect roughly one in five American workers, or around 30 million people, according to the agency, whose purview includes antitrust and consumer protection issues.Victoria Graham, an F.T.C. spokeswoman, said the agency was disappointed by Judge Brown’s decision and would “keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation and depress wages.”“We are seriously considering a potential appeal, and today’s decision does not prevent the F.T.C. from addressing noncompetes through case-by-case enforcement actions,” Ms. Graham added.A tax firm, Ryan, sued to block the rule just hours after the F.T.C. voted 3 to 2 in April to adopt it. The U.S. Chamber of Commerce later joined the case as a plaintiff, as did the Business Roundtable and two Texas business groups.The Chamber of Commerce and other groups have asserted that the F.T.C. lacks constitutional and statutory authority to adopt the rule, with Ryan calling it “arbitrary, capricious and otherwise unlawful” — a position with which Judge Brown agreed. Business groups have also argued that the ban would limit their ability to protect trade secrets and confidential information.In response to Judge Brown’s ruling, G. Brint Ryan, chief executive of Ryan, called the rule “continuing overreach and overregulation” by the federal government, adding that the firm was “happy we were able to successfully stop the overreach in this instance.”But the three Democrats on the five-member F.T.C. maintain that it can legally issue rules defining unfair methods of competition under the Federal Trade Commission Act of 1914, the law that created the agency.In a separate case, a federal judge in Pennsylvania declined last month to block the rule. Diverging rulings on the fate of the ban could leave the door open to review by higher courts.“Many businesses will welcome the reprieve, but the uncertainty continues as the fight now moves to the appellate courts,” said Kevin Goldstein, an antitrust partner at Winston & Strawn. More

TOKYO (Reuters) – Japan’s Nikkei 225 share average will extend its recovery from the worst sell-off in 37 years during the rest of 2024 before pushing to an all-time high by the end of next year, according to forecasts in a Reuters poll.The Nikkei will rise 7% to 40,000 by year-end before rallying to 42,000 by end-June and then to a record 42,500 by the end of 2025, median forecasts from an Aug. 8-20 poll of 18 analysts showed. Japan’s benchmark stock index closed at 37,388.62 on Monday.”Valuations remain attractive, interest rates remain low, and corporate reforms continue to progress,” said Tony Sycamore, a markets analyst at IG.The Nikkei could suffer another pullback in 2024 “as the Bank of Japan continues to raise rates and due to higher volatility across global markets”, Sycamore said. “However, with positioning in the yen much cleaner, I would expect that to play less of a role into year-end.”The Nikkei surged to an unprecedented 42,426.77 on July 11 but then retreated sharply amid a dramatic rebound in the yen from its weakest since the end of 1986. Traders unwound carry trades funded with the Japanese currency en masse after the BOJ unexpectedly shifted to a hawkish stance, while a run of weak U.S. economic data spurred bets the Federal Reserve would need to rush to cut interest rates.Surprisingly soft payrolls data at the start of this month was the catalyst for the Nikkei to crash 12.4% on Aug. 5, touching its lowest since Halloween and ending with its biggest one-day drop since Black Monday in 1987.Improved U.S. macro indicators since then and a BOJ backtrack have seen equity markets stabilise, and analysts overall expect the strong financial results and corporate reform push – led by the Tokyo Stock Exchange and backed by the government – that lifted the Nikkei at the start of the year to continue to buoy it into next year.Eleven of 13 analysts who responded to an additional question on earnings predicted they would outperform expectations over the rest of this year.Analysts were split, however, on the likelihood of more near-term volatility, with six of 13 respondents saying an additional correction of 10% or more for the Nikkei by the end of September was likely, versus seven who said it was unlikely.”The stock price has already fallen, and appears to be undervalued,” said Hiroshi Namioka, a strategist and fund manager at T&D Asset Management, who does not foresee another near-term pullback.”Institutional investors with short evaluation periods, such as one year, may be reluctant to buy, but for individual investors with long-term investments, this large drop seems to have been an extremely attractive buying opportunity.”(Other stories from the Reuters Q3 global stock markets poll package) More

(Reuters) – A look at the day ahead in Asian markets.Interest rate decisions in Thailand and Indonesia top the Asian calendar on Wednesday, as investors put the recent rebound across many markets on hold and look ahead to a keynote speech from U.S. Fed chief Jerome Powell later in the week. The global equity market picture going into Wednesday appears to be one of consolidation, while U.S. Treasury yields are retreating once again and the dollar is printing fresh lows for the year. Fed Governor Michelle Bowman, one of the most hawkish U.S. rate-setters, on Tuesday repeated that she sees upside risks to inflation and is cautious about cutting rates. But traders are increasingly confident the easing cycle will begin next month, and are putting a 30% probability on the Fed kicking it off with a half percentage point cut.The two-year Treasury yield is back below 4.00% and the dollar index is down 3% this month. This is supportive of Asian and emerging markets – MSCI’s emerging market currency index on Tuesday hit a fresh record high.Taking advantage of the dollar’s weakness, the Chinese yuan posted its biggest one-day rise this year at the central bank’s daily fixing on Tuesday. In the spot market, the yuan registered its strongest close since Jan. 2.Asia’s calendar on Wednesday also includes Japanese trade figures and South Korean producer price inflation, but the focus will be on Bangkok and Jakarta.The Bank of Thailand will keep its one-day repo rate unchanged at 2.50% and through the first quarter of next year, according to a Reuters poll, as policymakers balance growth, inflation and ongoing political instability.Rates traders are more dovish though, attaching a roughly 80% probability to a quarter-point cut in December. Inflation is running below target and the government has repeatedly called for interest rates to be cut, but central bank governor Sethaput Suthiwartnarueput has so far resisted.Figures on Tuesday showed that the Thai economy expanded in the second quarter faster than economists had expected, with annual growth reaching 2.3% against estimates of 2.1%. First quarter growth was revised up too.Bank Indonesia, meanwhile, is also widely expected to keep its benchmark seven-day repo rate on hold at 6.25%, then cut borrowing costs in the fourth quarter after the Fed’s easing cycle gets underway, according to a Reuters poll.Annual inflation is barely 2.00%, the lowest in two and a half years, but policymakers are wary that easing policy too soon could weigh heavily on the rupiah. Asian currencies are generally weaker against the dollar so far this year but have recovered most of these losses in recent weeks. The Thai baht is even up slightly year to date.Here are key developments that could provide more direction to Asian markets on Wednesday:- Thailand interest rate decision- Indonesia interest rate decision- Japan trade (July) More

NEW YORK (Reuters) – Nearly 50,000 people in New Jersey will have $100 million in medical debt erased, Governor Phil Murphy said on Tuesday, in one of the largest cases of a state providing direct relief to people unable to pay medical bills.Murphy allocated $550,000 in federal American Rescue Plan funds and partnered with Undue Medical Debt, a non-profit that buys unpaid medical bills from hospitals at a discount, to execute the one-time debt abolishment.New Jersey residents who qualify for the relief began receiving letters on Monday, according to a press release from the governor’s office.“Medical debt accumulates very quickly and can follow a person for decades,” Murphy said in the release. “We are wiping the slate clean for thousands of New Jersey families, eliminating their debt, and making a real, tangible impact on their lives.”Those who qualify for the relief are at least four times below the federal poverty level or have medical debt that equals 5% or more of their annual income, according to the press release. The relief will go to 17,905 people who owed $61.6 million to Prime Healthcare hospitals and 31,748 people owing about $38.4 million to collection agencies and other debt holders. Undue has partnered with local governments to acquire debt from hospitals since 2022. Arizona, Indiana and New York City have announced programs this year that could each eventually erase $1 billion-$2 billion in medical debt with the help of Undue.Governments have also leveraged funds from the American Rescue Plan, the $1.9 trillion coronavirus relief bill signed in 2021, to eliminate an estimated $7 billion in medical debt for nearly 3 million Americans, according to a White House press statement in July.Some states are finding other methods to relieve their residents of burdensome medical bills, such as North Carolina, which received approval from the Biden administration last month to incentivize hospitals to forgive the debt of roughly 2 million residents in exchange for more Medicaid funds. More

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Median basic pay settlements in the three months to July were 4.5% higher than a year earlier, the smallest rise since the three months to April and down from 5% in the three months to June, human resources data provider Brightmine said.Pay deals were likely to slow further going into 2025, Brightmine said.”Employers that have made pay awards so far this year have already reacted to the falling inflation environment by putting in place lower pay awards than made last year,” said Sheila Attwood, senior content manager at Brightmine.”This practice is likely to continue among those concluding deals later in the year, with this group also looking like they will agree increases at a lower level than those seen in the year so far,” she added.A recent survey by the Chartered Institute of Personnel and Development showed employers planned to raise pay by 3% over the coming year, while a Bank of England survey of businesses pointed to a 4.1% rise.Official data last week showed British pay grew at its slowest annual pace in nearly two years during the second quarter of 2024 and there was a surprise drop in unemployment, albeit on a survey that is undergoing a major overhaul.When it cut interest rates on Aug. 1 after keeping them at a 16-year high of 5.25% for nearly a year, the BoE said it would continue to keep a close eye on wage growth. Investors see a roughly one-in-three chance of a September rate cut.Pay on the official earnings measure is still growing at nearly double the pace the BoE thinks is compatible with keeping inflation at its 2% target. More

“I will remain cautious in my approach to considering adjustments to the current stance of policy,” Bowman said in a prepared remarks Tuesday to a banking group in Alaska.While Bowman believes that the current level of monetary policy will help bring inflation to the 2% target, she warned of that upside risks to inflation persist.  “I still see some upside risks to inflation as supply conditions have now largely normalized and any further improvements to supply seem less likely to offset price pressures arising from increasing geopolitical tensions, additional fiscal stimulus, and increased demand for housing due to immigration,” Bowman added.Given the upside risks to inflation, the Fed governor expressed concern against “overreacting to any single data point,” which risks “undermining continued progress on lowering inflation.”If there is further progress on inflation, however, showing that price pressures are slowing  toward the 2% target, Bowman added, that it would “become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive on economic activity and employment.”Pushing back against expectations that a slew of rate cuts could follow following the widely expected September rate cut, Bowman said “it is important to note that monetary policy is not on a preset course.”The Fed governor also downplayed the weakness in the labor market seen in July report, saying the rise in the unemployment rate was “largely accounted for by workers who experiencing a temporary layoff and are more likely to be rehired in coming months.” More

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