2025-08-07 20:45
Banxico cuts rate to 7.75%, lowest since mid-2022 Deputy Governor Heath dissents, votes to hold rate at 8.0% Inflation mixed; core index above target at 4.23% MEXICO CITY, Aug 7 (Reuters) - The Bank of Mexico cut its benchmark interest rate by 25 basis points on Thursday in a divided vote, slowing its pace of monetary easing and bringing the rate to its lowest level in three years. The decision by the bank's five-member governing board brings the rate to 7.75%, its lowest since mid-2022. Sign up here. Deputy Governor Jonathan Heath was the sole dissenter, voting to hold the interest rate at 8.0%. The move was largely expected by the market after the bank's governing board signaled at its last meeting in June that it would move to smaller reductions after four consecutive cuts of a half of a percentage point. Banxico, as the Bank of Mexico is known, has been balancing dual challenges. It is seeking to bring down inflation while also stimulating the economy amid weak economic growth and uncertainty tied to trade tensions and geopolitical developments. In a statement, the central bank said the board's decision "took into account the behavior of the exchange rate, the weakness of economic activity, and the possible impact of changes in trade policies worldwide." While Thursday's statement noted the board would consider rate changes going forward, it left out more specific language that it had included in past announcements signaling future cuts. Heath, who has now voted to hold the rate for two consecutive meetings, called for prudence around lowering the rate at Banxico's June meeting, calling it "unrealistic" to expect inflation to fall on its own just because of stagnant economic forecasts. Mexico's economy grew just 0.7% in the second quarter, an improvement from 0.1% in the first quarter. Still, analysts polled by the central bank last month forecast 2025 growth of just 0.3%. INFLATION MIXED BAG Official data earlier on Thursday showed that Mexico's annual headline inflation slowed in July to 3.51%, its lowest level since late 2020. However, the closely watched core index, which strips out certain volatile products, remained above the bank's official target at 4.23%. Banxico targets inflation at 3%, plus or minus a percentage point. In its statement on Thursday, the central bank lowered its forecast for the average annual headline inflation in the third quarter to 3.8% from 4.1% previously. At the same time, the bank raised its forecast for core inflation in the third quarter from 3.8% to 4.1%. Gabriela Siller, head of analysis at Banco Base, said raising the core inflation forecast while leaving the headline forecast unchanged was "inconsistent with theory." "It also implies acknowledging that the recent slowdown in inflation has been driven by volatile prices, which poses an upside risk to headline inflation," Siller wrote on X. https://www.reuters.com/world/americas/bank-mexico-slowing-pace-cuts-brings-key-rate-lowest-three-years-2025-08-07/
2025-08-07 20:41
Residential bills may rise 30-60% by 2030, ICF analysis shows PJM's capacity auction prices soared 1,000% from two years ago Record-high auction prices impacting power bills PJM to address reliability and cost with stakeholders NEW YORK, Aug 7 (Reuters) - Homes and businesses in the largest U.S. electric grid - operated by PJM Interconnection - could face rate increases of up to 60% over the next five years as the energy needs of Big Tech's data centers intensify, according to analysts and consumer advocates. PJM covers the largest amount of data center demand in the world, and the region is becoming a test case for how AI's energy needs will hit homes and businesses, particularly as new electricity supplies are slow to be added. Sign up here. The latest energy auction held in July by the PJM Interconnection to cover electricity needs on peak demand days soared to $329 a megawatt day, a roughly 1,000% jump from two years ago. Those prices funnel down to power bills in PJM's territory, which stretches from the Mid-Atlantic region westward, covering all or part of 13 states and the District of Columbia. Analysts at ICF, a global consulting and technology services firm, said customer power bills in PJM could increase residential retail rates between 30% and 60% by 2030, largely due to rising costs caused by the capacity auctions, which determine the price paid to power plant owners to run overtime during extremely high power use. "This outcome underscores PJM's critical need for capacity, driven largely by surging demand from data centers, which is expected to outpace new generation additions," ICF said. In the short term, PJM expects the recent auction to have a year-over-year impact of 1.5% to 5% on utility bills starting June 2026. That would account for the capacity portion of bills alone, whereas utility spending on power lines and other build-outs and services to meet growing loads will also hit customer bills. With the rest of demand sources in PJM largely flat, data centers are pretty much driving all of those rising costs, said John Quigley, a senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania. "They are ground zero in terms of why we're seeing rising electricity costs," Quigley said. Data centers make up more than 90% of the new power demand PJM estimates it will see by the end of the decade, the grid operator has said in filings. “While economic growth is welcome in the PJM footprint, we recognize the impact that data centers are having on the system," PJM said in a statement. "We’re going to seek to address some of these challenges around reliability and cost with data center owners, consumers and all of our stakeholders, including our states, in the near future." UTILITY SPENDING On the supply side, rising power bills on PJM turf are caused by multiple factors, and capacity auctions are one component. The prices from those auctions in recent years take effect about a year out, so price impacts from the latest one in July will take effect next summer. Power bills are also affected by spending by utilities to build power lines and upgrade systems to deliver electricity to homes and businesses. As data centers drive power demand higher and spur the need to build new generation capacity, consumer advocates said they fear residential customers are subsidizing the AI ambitions of wealthy corporations. Some of the biggest utilities in PJM, including AEP (AEP.O) , opens new tab and Dominion(D.N) , opens new tab , this year announced significant increases to capital expenditure plans to meet new data center demand. That spending is paid for mostly by the public. As a way to soften the financial blow to customers, some utilities, including ones in New Jersey and Maryland, began to offer rebates. Those measures, however, are mostly temporary, and long-term fixes remain unclear if the pace of new power demand outstrips supply. “We have residential customers providing massive subsidies to some of the wealthiest corporations in the world to support their data centers,” said David Lapp, the head of Maryland’s Office of People's Counsel, a state agency that advocates for residential utility consumers. “It's just a massive transfer of wealth from small customers to data centers.” https://www.reuters.com/business/energy/power-costs-soar-pjm-region-data-center-demand-spikes-2025-08-07/
2025-08-07 20:39
Aug 7 (Reuters) - The Ontario government on Thursday issued a request for proposals for a feasibility study to explore the best way to establish a new economic and energy corridor in the state. The proposed corridor includes new Alberta-to-Ontario pipelines, which would transport Western Canadian oil and gas to refineries in southern Ontario and to tidewater ports such as a new deep-sea port on the coast of James Bay. Sign up here. The study will also assess the feasibility of port developments on James Bay, Hudson Bay and the Great Lakes, along with a potential refinery along the pipeline route. The energy corridor follows a recent memorandum of understanding between Ontario, Alberta and Saskatchewan to collaborate on protecting Canadian workers, expanding energy and trade infrastructure, and advancing nuclear development to meet rising demand. “In the face of unprecedented tariffs from the United States and increasing geopolitical instability, Canadians must work together across governments to build the energy and trade infrastructure we need to unlock new markets domestically and protect jobs,” said Kinga Surma, Ontario’s minister of infrastructure. https://www.reuters.com/business/energy/ontario-seeks-proposals-feasibility-study-cross-canada-energy-corridor-2025-08-07/
2025-08-07 20:38
CHICAGO, Aug 7 (Reuters) - Two people died on Thursday after a helicopter they were on board crashed into a barge on the Mississippi River, shutting the waterway to traffic near Alton, Illinois, the U.S. Coast Guard said. Preliminary information indicated the MD 369 helicopter hit power lines before the crash, according to the National Transportation Safety Board. Sign up here. The Federal Aviation Administration said there were two people on board when the helicopter crashed and the NTSB would lead the investigation. An NTSB investigator was expected to arrive on site on Friday, the agency said. Power company Ameren Corp (AEE.N) , opens new tab said a contractor and subcontractor were repairing and replacing tower lighting and marker balls on transmission lines. "We are saddened about today's tragic incident," Ameren said, adding that it would cooperate with investigators. No one was on board the barge, which caught fire after the crash, Coast Guard spokesperson Jonathan Lindberg said. Firefighters extinguished the blaze, he said. The river, a major shipping waterway for crops and other goods, shut from mile marker 199 to mile marker 201, Lindberg said. There was no estimate for when the river would reopen, he said. Alton is downriver from the Mississippi's confluence with the Illinois River, and the closure could delay barges carrying grain to the U.S. Gulf from Midwestern farms. https://www.reuters.com/world/us/helicopter-crash-kills-two-people-shuts-mississippi-river-coast-guard-says-2025-08-07/
2025-08-07 20:35
Aug 7 (Reuters) - MP Materials (MP.N) , opens new tab posted a smaller-than-expected second-quarter loss Thursday, as the U.S. rare earths miner benefited from higher production amid rising demand. Its shares jumped over 12% in trading after the bell. The stock has gained nearly 356% so far this year to last close. Sign up here. The company - which operates the only U.S. rare earths mine in Mountain Pass, California - has been in the spotlight as President Donald Trump's administration ramps up efforts to build out a domestic supply to reduce dependence on China. Last month, the company signed a multibillion-dollar deal with the U.S. government to boost output of rare earth magnets, which are widely used to build weapons, electric vehicles and many electronics. The deal, which would make the Pentagon the company's biggest shareholder, was followed by a $500 million deal with Apple (AAPL.O) , opens new tab for the supply of rare earth magnets to the iPhone maker. Production for neodymium and praseodymium (NdPr) — the two most in-demand rare earths — increased 119% to 597 metric tons in the second quarter ended June 30. The Las Vegas-based company posted an adjusted loss of 13 cents per share, compared with analysts' expectations of 19 cents loss per share, according to data compiled by LSEG. https://www.reuters.com/business/mp-materials-quarterly-loss-smaller-than-expected-higher-rare-earths-production-2025-08-07/
2025-08-07 20:21
Aug 7 (Reuters) - EOG Resources (EOG.N) , opens new tab beat estimates for second-quarter profit on Thursday, as a rise in output helped the U.S. energy producer offset a drop in crude oil prices. Brent crude fell nearly 20% on average in the quarter from a year earlier, dragged down by tepid global demand signals, mounting OPEC+ supply, and pressure from U.S. trade policies. Sign up here. While prices briefly spiked above $80 a barrel in June following Israeli strikes on Iranian nuclear facilities, they soon retreated to around $67 as geopolitical risk premiums faded and market focus shifted back to weak fundamentals. EOG said benchmark U.S. crude prices stood at $63.71 per barrel, down from last year's $80.55. The company's total quarterly production stood at 1.13 million barrels of oil equivalent per day (boepd), compared with last year's 1.047 million boepd. The Houston-based company posted an adjusted income of $2.32 per share for the quarter ended June 30, compared with analysts' estimate of $2.21, according to data complied by LSEG. https://www.reuters.com/business/energy/us-oil-producer-eog-beats-second-quarter-profit-estimates-2025-08-07/
