2026-01-30 04:56
Trump picks former Fed official Warsh to run Fed Jerome Powell's term as chair ends in May Dollar gains on the day, US stocks edge lower as markets react NEW YORK/LONDON/SINGAPORE, Jan 30 (Reuters) - The choice of Kevin Warsh to lead the U.S. Federal Reserve clears uncertainty on Wall Street about the central bank's likely next chair, but leaves investors weighing how the former Fed governor's past hawkish leanings will mesh with President Donald Trump’s insistence on far lower interest rates. Warsh, whom Trump nominated on Friday to lead the U.S. central bank, ending a months-long process, had been one of four candidates widely tipped as potential successors to Jerome Powell, whose term as chair ends in May. Sign up here. A proponent of tighter monetary policy as a Fed governor from 2006 to 2011, Warsh said recently that Trump is right to press for interest-rate cuts. "He was considered a hawk, but recently he seems to have aligned himself with Trump, so it's kind of difficult to assess how the market is going to accept this nomination," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "We just have to see whether or not he will be influenced by the White House." U.S. stock indexes fell on Friday following the announcement of Warsh's nomination, as investors also digested earnings reports, steep declines in precious metals prices, and a high inflation reading. The U.S. dollar index gained, continuing a rebound after falling to a four-year low earlier in the week. Longer-dated U.S. Treasury yields rose. Warsh must be confirmed by the Senate, and markets have focused on the degree to which Trump's Fed chair nominee will be susceptible to White House pressure to lower interest rates. Trump has castigated the Fed and Powell for not cutting rates more significantly. Earlier this week, the Fed held rates steady, after lowering its benchmark rate to 3.50%-3.75% last year. Interest-rate futures markets stuck with anticipating two rate cuts in 2026, with the likely next reduction in June, after the new chair takes over. Trump said on Friday it would be inappropriate to ask Warsh whether he would cut interest rates, but added he was confident Warsh was inclined to lower borrowing costs. "He’s abundantly qualified and will likely continue to be an independent thinker, not a puppet of the President," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin. "He may want lower rates for now, but not forever. A year from now, we may hear complaints from the White House about him." Warsh was not immediately available for comment. A Fed spokesperson said it did not have a comment. A SMALLER BALANCE SHEET? Some high-profile members of the investment and finance community said Warsh was a qualified and credible candidate. "I have known Kevin for many years in his many capacities serving our country and his background and experience are suited to the role," Brian Moynihan, Bank of America (BAC.N) , opens new tab chair and CEO, said in a statement. Warsh has "traditionally been an inflation hawk, so he has credibility and Fed experience," said Robert Dishner, fixed-income portfolio manager at Neuberger Berman. While investors think Warsh will be inclined to cut rates, they expect him to rein in the Fed's balance sheet. "Warsh has been consistently critical of the Fed’s active use of its balance sheet" over the past 15 years or so , Deutsche Bank economists said in a note. J.P. Morgan's chief U.S. economist, Michael Feroli, said in a note that he was "more aligned with conventional thinking" that a smaller Fed balance sheet should exert some moderate upward pressure on longer-term interest rates. The dollar, which slumped almost 10% last year, has come under renewed selling pressure this month, due in part to U.S. policy uncertainty. "It's never a good thing when you have concerns about the U.S. having a weak dollar policy ... but one of the reasons why the trade had gotten so aggressive is because people were concerned that Trump would nominate someone less independent and he's done the opposite," said Jamie Cox, managing partner at Harris Financial Group. FED INDEPENDENCE UNDER SCRUTINY Central bank independence from political pressure is a quality economists say is the bedrock of any central bank's inflation-fighting capabilities. "What's most important is this whole question of Fed independence," said Paul Karger, co-founder TwinFocus Capital Partners in Boston. That said, Karger believes that Warsh will not choose to rock that boat. "He's got prior Fed experience and Wall Street credibility; he's aware that he has a fiduciary duty. He understands that if there's no Fed independence, all bets are off." Concerns about Fed independence ratcheted up recently with the revelation of a federal investigation into Powell, who called the probe a "pretext" to pressure the central bank on monetary policy. Investec economist Sandra Horsfield said even the announcement by Trump of his Fed pick may not alleviate all uncertainty. "We still have the question whether this will actually get through to full confirmation by the Senate anytime soon, given that there's still the standoff between some of the members of the Senate over Fed independence questions and Powell's subpoena," she said. Several investors noted that Warsh would be only one vote on the Fed policy-making committee. Benjamin Connard, portfolio manager at Carnegie Investment Counsel, in Stamford, Connecticut, said "only time will tell" how Warsh works as chairman, but noted that "rates are set by the majority, so Warsh alone cannot cut them." “For a long-term investor, as long as there is continued confidence in the Fed as a whole, this nomination should not change your perspective,” Connard said. https://www.reuters.com/business/finance/trumps-fed-nomination-ease-market-uncertainty-all-eyes-warsh-2026-01-30/
2026-01-30 03:13
CK Hutchison shares drop 5.5% after court ruling Panama may need new tenders for port operations China opposed U.S. majority ownership of Panamanian ports PANAMA CITY, Jan 29 (Reuters) - Panama's Supreme Court late on Thursday annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison, leaving the future ownership of some Panama Canal operations unclear and possibly upsetting its plans to sell some terminals. Panama Ports Company, a CK Hutchison subsidiary, has held contracts since the 1990s to operate container terminals at the canal's Pacific and Atlantic entrances, separate from the waterway's operations. Sign up here. The decision could disrupt CK Hutchison's (0001.HK) , opens new tab proposed $23 billion sale of dozens of ports worldwide, including the Panamanian terminals, to a consortium led by BlackRock (BLK.N) , opens new tab and Mediterranean Shipping Company (MSC). CK Hutchison did not immediately respond to a request for comment from Reuters on the court's decision. The conglomerate's Hong Kong listed shares dropped 5.5% on Friday following the ruling, its largest one-day percentage fall in nine months. The Supreme Court said that after "extensive deliberation", it found the laws and acts underpinning the concession contract between the state and Panama Ports Company for the development, construction, operation and management of the terminals at Balboa and Cristobal were unconstitutional. The ruling comes amid a growing U.S.-China rivalry over global trade routes and is seen as a win for Washington, where President Donald Trump has pushed to curb Chinese influence over the Panama Canal, which carries about 5% of global maritime trade. The leading contenders to buy Hutchison's ports, BlackRock and MSC, did not immediately reply to requests for comment from Reuters. Trump had hailed the proposed deal to sell the ports, especially the Panamanian operations, as a victory since it would move the trading assets under majority U.S. ownership. However, China had threatened to block the deal for not being in its national interest. It had pushed for state-owned shipping company COSCO (1199.HK) , opens new tab to take a controlling stake in the buyout deal, sources previously told Reuters. CK Hutchison had been waiting for the Supreme Court to make a final ruling about the legal status of its contracts after the local attorney general determined the contracts "unconstitutional". Critics of the contracts, which were extended in recent years, also argued they disadvantaged Panama. The Supreme Court's decision could force the country to restructure the legal framework needed to hold port operations contracts and potentially require new tenders to operate the terminals. Ensuring uninterrupted port operations is critical for shipping lines that rely on Panama as a transshipment hub, where containers are transferred between vessels serving multiple routes. In July, Panamanian President Jose Raul Mulino said public-private partnerships could take over the two ports if the court invalidated the contracts with CK Hutchison. Analysts have flagged the likelihood Panama Ports will lodge an arbitration complaint after losing the case. https://www.reuters.com/world/asia-pacific/panama-court-voids-ck-hutchison-port-contracts-2026-01-30/
2026-01-30 03:02
MUMBAI, Jan 30 (Reuters) - The Indian rupee was largely flat on Friday, squeezed between a broadly firmer dollar and likely central bank intervention, which also dulled the pressure from weakness in local stocks. The rupee was at 91.9450 per dollar as of 10:45 a.m. IST, up marginally from its close at 91.9550 previous session. Sign up here. The currency hit a record low of 91.9850 on Thursday and is on course for a monthly decline. The central bank's intervention helped the rupee hold above the 92 handle on Friday, similar to the previous session. "With USD/INR hovering near 92.00, this level remains the key near-term pivot. A sustained break above it could open the door toward 92.20–92.50," said Amit Pabari, managing director at FX advisory firm CR Forex. The rupee is down about 2.3% so far in January and is headed for its worst monthly performance since September 2022, pressured by weaker foreign capital inflows, elevated importer hedging activity and heightened dollar demand from banks linked to bullion imports. Traders and analysts reckon that the pressure on the rupee will persist in the near term and a breakthrough in U.S.-India trade negotiations or a recovery in foreign portfolio inflows will help turn around the currency's fortunes. Foreign investors have net sold about $4 billion of local stocks in January. On Friday, India's benchmark equity index, the BSE Sensex (.BSESN) , opens new tab, was down about 0.4%, while the Nifty 50 (.NSEI) , opens new tab fell 0.5%, tracking a decline in MSCI's gauge of Asian shares outside of Japan. The dollar index was up 0.3% at 96.5 after U.S. President Donald Trump said he would soon announce his nominee to head the Federal Reserve and on optimism Washington will avert a government shutdown. Bloomberg News reported on Friday that the Trump administration is preparing to nominate Kevin Warsh as the next Fed chair. https://www.reuters.com/world/india/rupee-leans-rbi-soften-impact-flows-weak-asian-cues-2026-01-30/
2026-01-30 02:29
Jan 30 (Reuters) - The London Metal Exchange has resumed trading on Friday after a one-hour delay due to technical issues. Trading resumed at 0200 GMT. Sign up here. "Due to a technical issue there is a delay to the opening of LMEselect," LME said in an emailed statement to Reuters, referring to its electronic trading platform. The LME, the world's oldest and largest market for industrial metals, which is owned by Hong Kong Exchanges and Clearing (0388.HK) , opens new tab, usually operates LMEselect from 1 a.m. to 7 p.m. London time, according to its website. https://www.reuters.com/world/uk/london-metal-exchange-resumes-trade-after-one-hour-delay-2026-01-30/
2026-01-30 02:04
Precious metals remain on course for monthly gains Trump announces Kevin Warsh as new Fed Chair Gold hit record high of $5,594.82 on Thursday Jan 30 (Reuters) - Gold fell on Friday and was headed for its steepest daily fall since 1983 after U.S. President Donald Trump announced his choice for Fed chair, while silver slumped nearly 30% and was poised for its worst day on record. Spot gold dropped 9.5% to $4,883.62 per ounce at 1:57 p.m. ET (1857 GMT) after prices climbed to a record peak of $5,594.82 on Thursday. Sign up here. U.S. gold futures for February delivery settled 11.4% lower at $4,745.10. The selloff, described by analysts as profit-taking, also pressured other precious metals. The market was due for a correction and the triggers behind the selloff could be a combination of factors, ranging from the Fed chair announcement to broader macro flows, said Suki Cooper, global head, commodities research at Standard Chartered Bank. "Whether we look at the dollar or expectations for real yields, a combination of these drivers has helped trigger profit-taking," she added. Trump named former Federal Reserve Governor Kevin Warsh as his choice to succeed Jerome Powell as Fed chair in May, placing a frequent critic of the central bank in a key leadership role. Gold remains on track for a more than 13% rise this month, marking its sixth consecutive monthly increase. The U.S. dollar index (.DXY) , opens new tab gained 0.7%, rebounding from a four-year low earlier this week and making greenback-priced gold more expensive for overseas buyers. "January 2026 is done, (and) it will go down as the most volatile month in precious metals history," said Nicky Shiels, head of metals strategy at MKS PAMP SA, in a note. She said that gold at $4,600, silver at $80, and platinum at $2,000 are reasonable downside targets, adding that prices would need to decline to reset toward a more moderate bullish trajectory. Among other precious metals, spot silver was down 27.7% at $83.99 an ounce after dropping as low as $77.72. Prices were on track for their biggest daily drop on record, based on LSEG data available through 1982. The white metal hit a record high of $121.64 on Thursday and has surged more than 17% this month. Spot platinum lost 19.18% to $2,125 an ounce and palladium plunged 15.7% to $1,682. https://www.reuters.com/world/india/gold-slips-firmer-dollar-set-best-month-since-1980-2026-01-30/
2026-01-30 02:01
Jan 29 (Reuters) - Former Federal Reserve Governor Kevin Warsh came to the White House for a meeting with U.S. President Donald Trump on Thursday, according one source familiar with the matter. A second source, briefed on the discussion, said the former Fed governor impressed Trump, who is vetting candidates to replace Jerome Powell when the current Fed chair's term is up in May. Sign up here. The source added that nothing was final until Trump announced his pick, which is expected on Friday. https://www.reuters.com/world/us/former-fed-governor-warsh-met-with-trump-thursday-2026-01-30/
