2025-08-07 16:24
Waller met with Trump team, has not met with president: Bloomberg News Trump has demanded lower rates to reduce government borrowing costs Waller supports lower rates to help labor market Aug 7 (Reuters) - Federal Reserve Governor Christopher Waller is emerging as a top candidate to be the central bank's next chair, Bloomberg News reported on Thursday, citing people familiar with the matter. Waller has met with members of President Donald Trump's team, who are impressed with him, though he has not met with the president, Bloomberg News reported. A Fed spokesperson had no comment. Sign up here. "President Trump will continue to nominate the most competent and experienced individuals to deliver on his pledge to Make America Wealthy Again," White House spokesperson Kush Desai said. "Unless it comes from President Trump himself, however, any discussion about personnel decisions should be regarded as pure speculation." Trump has repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates, and while he has backed off threats to try to oust Powell before his term ends on May 15, has accelerated the search for a replacement. Trump's pick will be closely scrutinized for a perceived ability to carry out monetary policy without ceding to political pressure, a quality that economists say is the bedrock of any central bank's inflation-fighting capabilities and what underpins the financial stability of the U.S. economy. Powell has not said if he would break with tradition and stay on as Fed governor after his chair term ends, though analysts speculate that if he felt the Fed's independence was under threat he would do so to deny Trump the chance to fill another open Fed seat. Waller, a PhD economist whose first speech after becoming Fed governor was about Fed independence, could allay those concerns. Waller wanted an interest-rate cut at the Fed's July meeting, and dissented along with fellow Trump appointee Fed Vice Chair Michelle Bowman when the majority decided to leave short-term borrowing costs unchanged. While Trump has called for lower rates in order to reduce the cost of government borrowing, Waller has built his case for lower rates on the argument that tariffs won't boost inflation and that a slowing labor market needs the support of easier policy. He has rejected the idea that rate-setting should have anything to do with making financing cheaper for the U.S. Treasury. White House economic advisor Kevin Hassett and former Fed Governor Kevin Warsh, both of whom have also expressed support for cutting interest rates, remain under consideration for the Fed chair job as well, Bloomberg News said. Trump on Wednesday said both men and an unnamed third person are candidates to fill a soon-to-be-open seat on the Fed board vacated by Governor Adriana Kugler, whose unexpired term runs through January. https://www.reuters.com/world/us/waller-is-favorite-fed-chair-among-trump-team-bloomberg-news-reports-2025-08-07/
2025-08-07 15:38
BoE says QT has probably raised 10-year gilt yields by 15-25 bps Last year BoE estimated 10-20 bp impact from QT BoE cutting bond holdings at annual pace of 100 billion pounds Bond market analysts expect BoE to slow QT next month LONDON, Aug 7 (Reuters) - The Bank of England said on Thursday it estimates that its programme to cut its bond holdings may have added as much as a quarter of a percentage point to the cost of 10-year British government borrowing, slightly more than it thought a year ago. Britain's central bank bought 875 billion pounds ($1.17 trillion) of gilts between 2009 and 2021 to support the economy through successive crises. It has reduced that debt pile by more than 300 billion pounds since 2022, through a mix of bond sales and allowing existing bonds to mature. Sign up here. Each August, the BoE assesses the impact of the programme over the past year, before its Monetary Policy Committee in September sets the pace at which bond holdings should fall over the following 12 months. Since October 2024 the BoE has reduced its holdings by 100 billion pounds - largely due to 87 billion pounds of gilts which matured. Market participants polled by the BoE earlier this year expected the stockpile to drop by 75 billion pounds in the 12 months from October 2025. In a report published after its August MPC meeting, the BoE revised up its estimate of the total impact of its quantitative tightening programme on 10-year gilt yields to 0.15-0.25 percentage points from 0.1-0.2 percentage points a year ago. This reflected the extra QT over the past year, it said. 'GRADUAL' SALES BoE Deputy Governor Dave Ramsden said at a press conference that the central bank intended to stick with its existing approach to QT, which included conducting gilt sales in a "relatively gradual and predictable manner". But he said it was too soon to give more detailed guidance on the future pace of QT. Market analysts at U.S. bank Citi said the report and Ramsden's comments made them more sure in their view that the BoE would cut the annual pace of QT to 75 billion pounds next month, and had led to modest price gains for longer-dated gilts on expectations of fewer sales. "Prudence alone suggests a slower pace, with either a subtle shift shorter by adjusting the longer maturity buckets to 7-15 years and 15 years-plus or just ending long sales completely," they said. Ten-year gilt yields have risen by about 3.25 percentage points since the start of QT in February 2022 and by 0.55 percentage points over the past year. Thirty-year gilt yields have risen more sharply, however, up by nearly a full percentage point over the last 12 months, and some economists think the BoE could skew its sales away from these gilts, or even stop them entirely. "We are very cognisant of developments in gilt markets, particularly at the long end. We have seen that spread between 30-year and 10-year widen," Ramsden said, but added that other bond markets had seen similar moves. The BoE's assessment noted that sales of long-dated gilts could have a bigger impact on liquidity due to reduced demand in the market from pension funds. "These same shifts in the gilt market could pose a risk that QT has a greater impact on market functioning than previously," it said. ($1 = 0.7454 pounds) https://www.reuters.com/world/uk/bank-england-sees-bigger-qt-impact-gilt-yields-2025-08-07/
2025-08-07 15:15
Stock pickers up 7.8% in 2025 Quants recover from record monthly loss Crowded trades drain gains LONDON/NEW YORK, Aug 8 (Reuters) - Hedge fund returns climbed in July as many were lifted by rising stock markets that hit record highs, though others were caught in turbulence sparked by U.S. trade uncertainty, according to a Goldman Sachs report and sources familiar with the funds. Hedge fund stockpickers returned almost 1.5% in July and are up roughly 7.8% for the year so far, said Goldman Sachs in a note to clients on Monday seen by Reuters. Sign up here. Systematic hedge funds trading stocks were on track to deliver their worst monthly performance on record before rebounding after July 25 to claw back half of their losses, finishing with a negative 2% return, said Goldman. These funds were up 10% for the year so far, however, added the bank. While stockpickers benefited by piling into already crowded trades, hedge funds using algorithms to create systematic trading strategies were hurt by busy trades, said Goldman. The S&P 500 (.SPX) , opens new tab hit record highs during July, but only returned 1.38%. The biggest multi-strategy funds posted muted returns, including Schonfeld Strategic Advisors' flagship fund Strategic Partners, which was down 0.3% in July and is now up 5.8% for 2025, according to a source familiar with the matter. Schonfeld's Fundamental Equity fund gained 1.4% last month and was up 7.1% in the year, the source added. The $76.9 billion British hedge fund Marshall Wace returned a negative 0.2% in its Market Neutral TOPS fund, bringing its half-year performance to roughly 11%. Its Eureka fund returned 1.6% in July and is up 6.1% for 2025 so far, said another source familiar with the fund's results. *result as of Aug 4 https://www.reuters.com/markets/wealth/how-hedge-funds-performed-turbulent-july-2025-06-03/
2025-08-07 14:21
TORONTO, Aug 7 (Reuters) - Canadian economic activity expanded in July at the fastest pace in one year as employment rose, Ivey Purchasing Managers Index (PMI) data showed on Thursday. The seasonally adjusted index rose to 55.8 last month from 53.3 in June, posting its highest level since July 2024. A reading above 50 indicates an increase in activity. Sign up here. The gauge of employment edged up to an adjusted 51.2 from 49.5 in June, while the prices index was at 68.5, down from 70.2. The unadjusted PMI was unchanged from June at 54.6. https://www.reuters.com/world/americas/canadas-ivey-pmi-climbs-one-year-high-july-2025-08-07/
2025-08-07 13:34
Aug 7 (Reuters) - Mexico's headline inflation slowed in July to its lowest level since late 2020, but the closely-watched core rate remained above the central bank's official target, data from national statistics agency INEGI showed on Thursday. The figures were released ahead of the Bank of Mexico (Banxico)'s announcement later in the day of its next interest rate decision. Markets were widely expecting the bank to slow down the pace of monetary easing in Latin America's second-largest economy. Sign up here. Annual inflation in July hit 3.51%, INEGI said, down from 4.32% a month earlier, marking the lowest reading since December 2020. Economists polled by Reuters had expected it to come in at 3.53%. Core inflation, meanwhile, stood at 4.23%, slightly below June's 4.24% and in line with market forecasts. The core index, seen as a better parameter for measuring price trends as it strips out some volatile food and energy prices, remained above the central bank's inflation target of 3%, plus or minus a percentage point. The bank in June lowered its benchmark rate by half a percentage point for the fourth consecutive time to 8%, but the decision by the five-member board was not unanimous, as Deputy Governor Jonathan Heath voted to leave the rate unchanged. According to the minutes from that meeting, all four officials who backed the cut said the board may adopt a more gradual approach in future decisions. The latest inflation data "paves the way for Banxico to deliver the clearly-signaled 25-basis-point cut, to 7.75%," said Capital Economics emerging markets economist Kimberley Sperrfechter. In July alone, consumer prices in Mexico rose 0.27%, according to non-seasonally adjusted figures. The core index rose 0.31% during the month. Both were in line with market expectations. https://www.reuters.com/world/americas/mexicos-inflation-slows-july-central-bank-set-deliver-fresh-rate-cut-2025-08-07/
2025-08-07 12:57
Aug 7 (Reuters) - Cummins India (CUMM.NS) , opens new tab reported a 30.5% rise in first-quarter profit on Thursday, helped by robust demand for its engines and power generators. The company, a unit of U.S.-based truck engine maker Cummins Inc (CMI.N) , opens new tab, said its consolidated profit after tax rose to 6.04 billion rupees ($69.05 million) from 4.63 billion rupees a year ago. Sign up here. Demand for power generation equipment typically rises in the summer due to increased electricity consumption from cooling systems and a higher risk of grid overloads or outages, which helps companies like Cummins India. Despite an early onset of monsoons across India this year, several regions still experienced heat waves. A study found in May that nearly 60% of Indian districts face a "high to very high" risk from extreme heat, with rising night-time temperatures and humidity intensifying. The company had noted demand across the board, including the generator business, in its last earnings call in May. Overall sales rose 25.7% on-year to 28.59 billion rupees in the June quarter. Sales of engines and power generators accounted for the majority of the company's revenue, according to their latest annual report. Cummins also recorded a one-off gain of 125.9 million rupees in the quarter from the sale of its stake in a subsidiary. Total expenses rose by 23.4% to 23.34 billion rupees, primarily driven by a 34.2% surge in raw material costs. Parent Cummins Inc reported second-quarter revenue above Wall Street estimates on Tuesday, helped by strong demand for its power generation systems. Cummins India's shares closed up 1.1% ahead of results. ($1 = 87.4740 Indian rupees) https://www.reuters.com/business/energy/cummins-indias-quarterly-profit-rises-higher-engine-generator-demand-2025-08-07/
