Economy

The move is the latest sign of trouble for the trans-Atlantic automaker, which has had sluggish North American sales and has said it needs to cut costs.Stellantis announced plans on Friday to lay off as many as 2,450 workers later this year at a pickup truck plant near Detroit, the latest sign of trouble for the trans-Atlantic automaker.The layoffs are expected to begin as early as Oct. 8 at the Ram truck plant in Warren, Mich., where production will be reduced to one shift from two, the company said on Friday.Stellantis’s chief executive, Carlos Tavares, has said the company needs to cut costs, and he has noted that at least one North American factory was operating at an unsatisfactory level.The company has been hit by sluggish sales in North America, where it generates most of its profits, as well as bloated costs and manufacturing inefficiencies. It reported last month that profits in the first six months of 2024 fell by nearly half to 5.6 billion euros (about $6 billion).“It is an understatement to say that the first-half 2024 results were disappointing and humbling,” Mr. Tavares said on a call with analysts after the earnings report. “This is a bump on the road that we are now fixing and that we are going to fight against to make sure that we can rebound from here, and that we fix the operational issues that we face.”The layoffs are related to a planned transition to a new version of the Ram pickup that is just going into production at a plant in Sterling Heights, Mich. The Warren plant will continue making an older version of the truck on one shift, the company said on Friday, adding that the actual number of workers affected will probably be lower than the 2,450 noted in a report to the state of Michigan.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

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U.S. inflation numbers, the latest Japanese economic data and a slew of UK data could give investors a fresh steer. Here’s your guide to the week ahead in financial markets from Ira Iosebashvili in New York, Rae Wee in Singapore and Dhara Ranasinghe, Samuel Indyk and Amanda Cooper in London. 1/ SUMMER CHILL, NO WAYInvestors should have learned by now that there’s no such thing as a “quiet” summer in markets. A year ago, Treasury yields rose sharply on worries about the U.S. fiscal outlook. The summer before, inflation and rate hike fears jolted markets. Monday’s meltdown saw Japan’s second-biggest stock crash and the largest ever intraday jump in Wall Street’s most-watched gauge of investor anxiety, the VIX. That means the coming days will be tinged with nervousness, even if there are nascent signs of recovery.Focus is on just how much more of an unwinding of so-called yen carry trades, seen as one reason behind the rout, is left and whether the pricing-in of aggressive U.S. rate cuts are justified by upcoming data.And with concerns about a broader Middle East conflict and a U.S. election looming, volatility is unlikely to disappear soon. 2/ READY FOR MORE?Investors are now bracing for Wednesday’s U.S. consumer price data for a read on how inflation is faring in the world’s largest economy amid recent signs that growth is wobbling.Market hopes of an economic soft landing have been shaken by recent weak data, including news of a rapid down-shift in the jobs market. The slowdown fears have coalesced with the unwinding of a global carry trade to deliver markets a wallop.Some analysts believe recession worries are premature. Economists polled by Reuters expect both headline and core consumer prices rose 0.2% in July from a month earlier.A number that shows only modest cooling could allay fears that the Federal Reserve has sent the economy into a tailspin by leaving rates elevated for too long. But a weak report could bolster recession worries, potentially sparking fresh market volatility. 3/ DISENCHANTMENT    Japan reports preliminary second-quarter growth figures on Thursday, at a time where some analysts have critiqued the Bank of Japan’s (BOJ) recent rate hike as a policy misstep that triggered the brutal selloff in stocks.To be sure, the connection isn’t quite so straightforward.The BOJ’s hike sparked a resurgence in the yen and extended an unwinding of the hugely popular yen carry trade, which in turn sent investors de-leveraging and shedding their stock holdings to cut losses.So should Thursday’s data point to a brighter outlook, Japanese policymakers can finally breathe a sigh of relief. A downside miss and they’d have to find more reasons to justify July’s hike.    It’s yet another busy week in Asia-Pacific, with a New Zealand rate decision due on Wednesday, alongside a slew of data from China.4/ DELICATE BALANCEAfter July’s finely balanced decision to cut UK rates to 5.0%, the Bank of England will have a new set of data points to go through that might help determine what the coming few months look like for monetary policy. Consumer inflation, including for the still-hot services sector, as well as second-quarter GDP and retail sales, are all in the mix. Right now, markets expect rates to fall by a percentage point over the coming nine months. But given how close July’s decision was, UK assets are likely to be extra sensitive to anything that might suggest the BoE has to deviate from that expected path. Sterling is looking fragile and UK equities have seen nothing but weekly outflows for four straight months, according to LSEG/Lipper data.5/ EUROPE’S SILVER LININGThere’s a silver lining for European shares, down roughly 5% so far this month, and that’s corporate profits, with earnings set to grow for the first time in five quarters.According to LSEG I/B/E/S data, Q2 earnings are expected to have increased 3.8% from the same period last year, the first quarterly rise since the first quarter of 2021. Almost 56% of companies have reported results that beat analyst estimates. For sure, there are more tests ahead. Switzerland’s largest bank UBS reports earnings on Wednesday, while it’s a big week for the insurance sector, with Hannover Re, Aviva (LON:AV), NN (NASDAQ:NNBR) Group and Admiral set to report.Overall, the Q2 earnings season suggests signs of a consumer slowdown, but strong growth in financials, energy and utilities sectors have helped offset weakness elsewhere. (Graphics by Prinz Magtulis, Pasit Kongkunakornul, Kripa Jayaram and Sumanta Sen; Compiled by Dhara Ranasinghe; Editing by Toby Chopra) More

“I feel the president should have at least (a) say in there” on Fed decisions, the former president told reporters at his Mar-a-Lago residence in Florida. His comment follows a report this spring that Trump allies have drafted proposals that would attempt to erode the Fed’s independence if he wins. While the Trump campaign distanced itself from the Wall Street Journal report at the time, his remarks on Thursday indicate he is squarely aligned with one of the proposals’ main thrusts: If he becomes president, Trump should be consulted on interest rate decisions, and Fed banking regulation proposals should be subject to White House review.Presidents grousing about the Fed – especially at times when it is raising interest rates – is hardly a new phenomenon, but such a direct involvement in Fed affairs by Trump should he win would make him the first president since Richard Nixon in the early 1970s to dabble directly in Fed policymaking.Trump’s view contrasts with that of Vice President Kamala Harris, his rival for president. An aide to Harris on Friday said the Democratic candidate believes the Fed should make decisions independent of the president.PRESIDENTIAL APPOINTMENTThe clearest path for exerting control is through the appointment process. The Fed chief is nominated by the president, subject to Senate confirmation, and Trump could attempt to install a Fed chief willing to elevate allegiance to him over the Fed’s long-standing independence. Trump has a long history of knocking heads with current Fed Chair Jerome Powell, whom he installed as central bank chief in 2018. It was a relationship Trump revisited in his remarks on Thursday, saying “I fought him very hard.”Powell managed to weather Trump’s verbal assaults and has spent considerable time as chair building relationships with top Republicans and Democrats in Congress that have fortified his standing.His second term as chair – Powell was reappointed by President Joe Biden – doesn’t expire until May 2026, and Trump told Bloomberg this summer that he would not try to oust Powell before his term ends – something Trump talked repeatedly about doing during his time in the White House. That would leave a window of a bit more than two years for Trump to exert sway over a new Fed chief of his choosing, assuming such a compliant choice wins Senate confirmation.The next president will also have a chance to choose the two Fed vice chairs – one for monetary policy and one for banking supervision.THE FED SYSTEMThe Federal Reserve System, created by Congress in 1913, comprises the Washington-based Federal Reserve Board; 12 regional Federal Reserve banks dotted across the country; and the interest-rate-setting Federal Open Market Committee.The Fed board’s seven members include the chair, two vice chairs and four other governors. All are presidential appointees subject to Senate confirmation.Beyond Powell, two Trump appointees remain on the board, and governors Michelle Bowman and Christopher Waller have hewn to the tradition of Fed independence. Three others Trump had eyed for a board seat who were seen by many as pushing that envelope – Stephen Moore, Judith Shelton and Herman Cain – withdrew or failed to win Senate confirmation.Each regional Fed bank is run by a president appointed by a subcommittee of each bank’s board of directors. The FOMC comprises all seven board members, the president of the Federal Reserve Bank of New York, and four other regional bank presidents on a rotating basis.THE BOARD NOWFed governors serve 14-year terms or the unexpired remainder of a previous incumbent’s term. Term expirations are staggered at two-year intervals, with the next one due in 2026, a seat held by Governor Adriana Kugler, a Biden appointee.Fed chairs and vice chairs serve four-year terms running concurrently with their governorships. Powell’s position as chair expires in May 2026, but his board seat continues until 2028. While historically former Fed chiefs have not stayed on as governor if not re-appointed as Fed leader, there is no requirement that they leave. If Powell were to opt to stay on, it would limit Trump’s options for installing more board members compliant with his wishes. The following is a list of current governors, in order of their term expirations with the nearest listed first.Board Member Joined board, Board term Became chair /vice Chair/ vice term extended ends chair, reappointed chair term ends Adriana Kugler 9/13/2023 Jan 2026 Jerome Powell, 5/25/2012, Jan 2028 2/5/2018, May 2026 chair 6/16/2014 5/23/2022 Christopher Waller 12/18/2020 Jan 2030 Michael Barr, vice 7/19/2022 Jan 2032 7/19/2022 July 2026 chair for supervision Michelle Bowman 11/26/2018, Jan 2034 1/23/2020 Philip Jefferson, 5/23/2022 Jan 2036 9/13/2023 Sept 2027 vice chair Lisa Cook 5/23/2022, Jan 2038 9/8/2023 THE BANK PRESIDENTS NOWFed bank presidents are picked by the six non-banker members of their boards of directors, and must be approved by the Fed Board. They can serve until the mandatory retirement age of 65 or, if appointed after the age of 55, for 10 years or until they reach age 75.The terms of all current bank presidents end in February 2026, when they will be considered for a fresh five-year appointment by the Board of Governors. This re-upping process historically has not resulted in any change in leadership, but this is custom not law. The following is a list of term limit dates for the Fed regional bank presidents.Bank President Expected end of term PHILADELPHIA Patrick Harker June 2025 RICHMOND Thomas Barkin Jan 2028 NEW YORK John Williams June 2028 SAN FRANCISCO Mary Daly Oct 2028 ATLANTA Raphael Bostic June 2031 BOSTON Susan Collins July 2032 KANSAS CITY Jeffrey Schmid August 2033 ST LOUIS Alberto Musalem April 2034 CHICAGO Austan Goolsbee August 2034 MINNEAPOLIS Neel Kashkari July 2038 DALLAS Lorie Logan February 2038 CLEVELAND Beth Hammack* January 2037 *is due to take office Aug. 21 More

NEW YORK (Reuters) -Longer-dated U.S. Treasury yields fell on Friday after a volatile week driven by concerns about the U.S. economic outlook, while investors turned to key inflation data next week for fresh clues on the potential size of an expected September rate cut.Yields have regained ground over the week after a dramatic bond rally sent them to more than one-year lows on Monday, with stock markets also recovering from a rout that was in part blamed on the unwind of popular dollar/yen carry trades.A bigger-than-expected drop in jobless claims on Thursday helped ease worries about the possibility of an imminent U.S. recession. Concerns rose after last Friday’s non-farms payroll report showed an unexpected increase in unemployment.“The main theme of the bond market at the beginning of the month was concerns about the state of the labor market and the future path of the Fed,” said Lou Brien, market strategist at DRW Trading in Chicago. Then “there was a lot of noise that was added onto markets because of the Yen carry trade.”That trade involves borrowing yen at a low cost to finance U.S. asset purchases, including tech stocks. A sharp rise in the yen against the U.S. dollar, however, led traders to unwind these positions.Yields on interest rate-sensitive two-year notes rose 1.1 basis points on the day to 4.055% and are up 18 basis points on the week, the biggest one week increase since March.Benchmark 10-year note yields fell 5.3 basis points to 3.944% and are up 15 basis points this week, the largest one week increase since April. The yield curve between two- and 10-year Treasury notes flattened 6 basis points to minus 11 basis points. It reached 1.50 basis points on Monday, turning positive for the first time since July 2022.The Fed is expected to cut rates at its next policy meeting on Sept. 17-18, but traders are grappling whether a 25 or 50 basis point reduction is more likely.Stephen Gola, head of U.S. Treasuries Sales & Trading at StoneX Group in New York, said that markets may be overestimating the odds of a 50 basis points cut.The Fed has “been very deliberate and slow-moving trying to adhere to their own tenet of policy working with long and variable lags,” he said. “Rush it when you need to, but otherwise we do live in 25 basis point increment world and we’re not falling apart at the seams.”Traders are currently pricing in a 51% probability of a 50 basis point cut, and 49% odds of a 25 basis point reduction, according to the CME Group’s (NASDAQ:CME) FedWatch Tool. A 50 basis-point cut had been fully priced in on Monday and traders had begun speculating on a possible emergency cut before September.Fed policymakers on Thursday said they are increasingly confident that inflation is cooling enough to allow interest-rate cuts ahead, and they will take their cues on the size and timing of those rate cuts not from stock-market turmoil but from the economic data.Consumer price data on Wednesday is the next major data point and is expected to show that inflation continues to edge down closer to the Fed’s 2% annual target.Annual core price growth is expected to slow to 3.2% in July, from 3.3% in June, and headline prices are expected to stay steady with a 3% annual gain, according to economists polled by Reuters.”I’m concerned about a surprise on the headline if there’s anything quirky in the data, but our base case is inflation is moving lower,” said Zachary Griffiths, senior investment grade strategist at CreditSights in Charlotte.”The economy is slowing, driven by the consumer that’s just running out of steam, running out of excess savings and starting to see this increase in the unemployment rate, which should work its way through to the spending and inflation numbers.”Assuming there are no upside surprises in inflation, jobs data and the unemployment rate in particular will likely remain the key focus for traders.“Concerns about the state of the labor market and the pace that the Fed’s going to go remain valid and will come more clearly into focus over the coming weeks,” said DRW’s Brien. “A lot of the components of the labor market have been weakening for a substantial amount of time and will continue to.”Comments by Fed Chair Jerome Powell at the Fed’s Jackson Hole Economic Policy Symposium on Aug. 22-24 may also provide new clues on the path of rate cuts. More

The People’s Bank of China (PBOC) will also seek to steadily lower companies’ financing and household credit costs, the report said, adding that prudent monetary policy should be “flexible, moderate, precise and effective.” The PBOC will “guide credit to grow reasonably and balance the supply of credit while keeping liquidity reasonably ample,” said the report. The central bank will pay attention to changes in long-term bond yields during economic recovery and said it will conduct stress tests on the risk exposures of bond assets held by financial institutions and prevent interest rate risks.”It’s necessary to enrich the monetary policy toolbox, enrich and improve methods of monetary base injection, and gradually increase buying and selling of government bonds in the central bank’s open market operations,” the PBOC said.The central bank will pay close attention to changes in the monetary policies of major overseas central banks, it added.China’s economic growth missed forecasts in the second quarter, depressed by a property downturn and sluggish domestic demand, while some July economic indicators showed a mixed and unbalanced recovery.The PBOC will also study plans to appropriately narrow its interest rate corridor and deliver clearer signals of interest rates adjustments to markets. The central bank last month launched temporary repo or reverse repos to make open market operations more efficient and keep the banking system liquidity ample. On the Chinese yuan, the PBOC vowed it will prevent the formation and self-reinforcement of unilateral expectations and will guard against risk of exchange rate overshooting. The yuan is up 0.7% against the dollar this month, in tandem with a surging Japanese yen, as an unwinding of short positions snowballed following a surprise rate hike by the Bank of Japan and weakness in U.S. economic indicators.To achieve a stable and sound development of the property sector, the PBOC said it will step up support to construction and seek to boost supplies of affordable housing. Keeping prices stable and ensuring moderate inflation will still be a significant consideration of the bank’s monetary policy, the bank said, adding it will keep prices at a “reasonable level.”China’s consumer prices rose at a slightly faster-than-expected rate in July, partly due to weather disruptions in food supplies, while producer deflation persisted, official data showed on Friday. More

(Reuters) – U.S. Vice President Kamala Harris believes the Federal Reserve should make decisions independent of the president, CNBC reported on Friday, citing a Harris aide.Republican presidential candidate Donald Trump said on Thursday that U.S. presidents should have a say over decisions made by the Federal Reserve. More

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