2025-06-25 14:48
NEW YORK, June 25 (Reuters) - Federal Reserve Bank of Boston President Susan Collins said on Wednesday she's leaning toward the central bank cutting rates later this year amid an uncertain outlook. "While I continue to expect it will be appropriate to resume gradual policy normalization later this year, my outlook could change significantly as events unfold, and the economic impact of changes in various government policies comes into sharper focus," Collins said in a statement released by her bank. "Much will depend on whether the 'price shock' from tariffs dissipates quickly," she said. Sign up here. The statement released by the Boston Fed described comments made by the bank president during local visits in Massachusetts. Collins weighed in after last week's Federal Open Market Committee meeting which held the central bank's interest rate target range steady at between 4.25% and 4.5%, a decision Collins said she supported. At last week's meeting, the Fed penciled in two rate cuts later this year but it's unclear when those might be delivered, even as some Fed governors have signaled openness to act at the late July FOMC meeting. In her statement, Collins said "I see monetary policy as currently well positioned" in an economy that's in solid position. Collins noted there remains considerable uncertainty about the outlook while saying President Donald Trump's trade policies continue to be one of the biggest drivers of what will happen. These tariffs should lead "to a rise in inflation, slower output growth, and a higher unemployment rate relative to current conditions." Collins noted Trump's pullbacks on some of the most extreme tariffs have reduced inflation risks but she said the jury remains out on what will happen, which means the Fed needs to be very attentive to incoming data. Collins said the tariffs should drive the underlying personal consumption expenditures price index "somewhat above" 3% by year-end. She added, "over the coming months, I expect the effects of tariffs to show through more significantly, as inventory front-loading wanes and tariffed goods hit the shelves and enter firms’ production processes." https://www.reuters.com/sustainability/boards-policy-regulation/feds-collins-says-rate-cuts-later-this-year-are-possible-2025-06-25/
2025-06-25 14:06
US recession probability seen at 40% in second half of 2025 Bearish outlook on the dollar due to slower US growth But Tech and AI likely to keep supporting US stocks NEW YORK, June 25 (Reuters) - U.S. trade policies will likely slow down global economic growth and rekindle inflation in the United States, where there is a 40% probability of a recession in the second half of this year, JPMorgan analysts said on Wednesday. U.S. economic growth is expected at 1.3% this year, down from a 2% forecast at the beginning of 2025, with higher U.S. tariffs seen as adding negative shocks to the economy, the bank said in a mi-year outlook research note. Sign up here. "The stagflationary impulse from higher tariffs has been the impetus for our lowered GDP growth outlook for this year," it said. "We still view recession risks as elevated." Stagflation is a worrying mix of sluggish growth and relentless inflation that haunted the U.S. in the 1970s. The U.S. bank has a bearish outlook on the U.S. dollar due to slower U.S. growth when compared to growth-supportive policies outside of the United States that will bolster other currencies, including in emerging markets. It expects the share of demand for U.S. Treasuries from foreign investors, the Federal Reserve, and commercial banks, to decline given the growing size of the U.S. debt market. The compensation required by investors for the risk of holding U.S. Treasuries, known as term premium, could increase by 40-50 basis points over time, it said, though it does not expect sharp increases in Treasury yields such as the ones seen in the first half of this year. In April, Treasury yields spiked amid broader market volatility caused by U.S. President Donald Trump's announcement of sweeping tariffs. JPMorgan expects U.S. Treasury two-year yields will end the year at 3.5% and benchmark 10-year yields at 4.35%. They stood at 3.8% and 4.3%, respectively, on Wednesday. Due to sticky inflation caused by tariffs and a resilient economy, the bank expects the Fed will cut interest rates by 100 basis points between December and spring 2026, later than the consensus among rates futures traders, who were betting on two 25-basis point rate cuts this year as of Wednesday. A recession or a sharper economic slowdown than anticipated, would trigger a more aggressive cutting cycle, the JPMorgan analysts said. Still, the bank remained bullish on U.S stocks, given continued consumer and economic resilience despite policy uncertainty. "Absent major policy and/or geopolitical surprises ... we believe the path of least resistance to new highs will be supported by Tech/AI-led strong fundamentals, a steady bid from systematic strategies, and flows from active investors on dips," it said. https://www.reuters.com/business/jpmorgan-sees-tariff-induced-us-stagflationary-slowdown-2025-2025-06-25/
2025-06-25 12:55
TOKYO, June 25 (Reuters) - Japan could face a big power shortfall in 2050 if demand surges and aging thermal power plants are not replaced and older nuclear plants are decommissioned, the country's power transmission operators said on Wednesday in a long-term forecast. For years Japan had predicted a drop in future electricity demand due to its shrinking population, but it has recently revised this outlook to reflect new demand from data centres and chip plants. Sign up here. Under the scenarios provided by the Organization for Cross-regional Coordination of Transmission Operators, Japan's electricity demand is projected to rise 2-25% by 2040 from 2019 before the COVID pandemic, and by 8-42% by 2050. One of the scenarios highlights an 89-gigawatt shortfall if demand reaches 1.25 terawatt-hours, the upper end of its demand forecast, in 2050. The group makes a 10-year forecast every year, but this is the first time it has produced a longer-term projection. Its general manager Shinpei Konishi told reporters the forecast was released "to enhance predictability for power operators and other stakeholders planning investments." The scenarios incorporate input from three expert organisations as well as feedback from energy industry groups and companies, and include kilowatt-hour gap analyses estimating how much thermal power would be needed to meet reserve margin requirements. The outlook reflects expected growth from expanding data centres, networks, semiconductor production, and vehicle electrification, Konishi said. In general, power industry experts are divided on how much the AI boom will increase electricity demand and the group's current forecasts also vary considerably. Among 16 scenarios for 2050, the largest projected shortfall - 89 GW - occurs under a high-demand case assuming no replacement of aging thermal power plants and decommissioning of nuclear plants more than 60 years old. Even with full replacement of thermal and nuclear capacity, a 23 GW shortfall remains under the same demand conditions. In contrast, a low-demand scenario with plant replacements shows a surplus of 12 GW. Each model assumes a summer nighttime scenario, when solar output drops and cooling demand peaks, representing the most severe conditions. The group forecasts renewable energy capacity to increase to between 170 GW and 260 GW in 2050. Japan's latest energy plan projects power generation to grow 12%-22% from 2023 levels to 1,100-1,200 TWh in 2040. The grid group's forecast sees demand reaching 900-1,100 TWh that year. It noted that its scenarios are not aligned with the government's energy plan, as they serve different purposes. https://www.reuters.com/sustainability/climate-energy/japan-could-face-potential-power-supply-crunch-2050-grid-monitor-says-2025-06-25/
2025-06-25 12:27
New Delhi to seek foreign investment to boost copper supplies India could court Codelco, BHP to set up smelters, refineries India's import dependence for copper concentrate to go up to 97% NEW DELHI, June 25 (Reuters) - India has held internal talks about its growing vulnerability to the tightening global copper market and plans to discuss ways to lock in supply from resource-rich countries during ongoing trade negotiations, according to two government sources and a draft government policy document. New Delhi is also considering measures to help boost domestic refined copper output, including through foreign investment, the sources and the document said. Sign up here. India meets over 90% of its copper concentrate needs through imports, and its dependency is expected to rise to 97% by 2047, said the document reviewed by Reuters. It produces an estimated 573,000 metric tons of refined copper annually against demand of around 1.8 million tons, relying on imports to bridge the gap. India could approach global majors such as Chile's state-owned miner Codelco, the world's largest copper producer, and Australian miner BHP (BHP.AX) , opens new tab to set up domestic copper smelters and refineries, said the sources and the document. Codelco declined to comment, while BHP and the federal Ministry of Mines did not respond to Reuters' emails seeking comments. Indian state firms could invest in overseas mining projects run by Codelco and BHP in exchange for participating in the development of copper infrastructure in India, said the sources, who asked not to be named because the plans were not public. India's copper imports have jumped since the 2018 closure of Vedanta's Sterlite Copper smelter. The country imported 1.2 million metric tons of copper in the fiscal year to March 2025, up 4% from a year earlier. 'RESOURCE NATIONALISM' Explaining the strategies likely to be adopted in bilateral trade pacts, the document stated that India is seeking to include a detailed "copper chapter" in its ongoing free trade negotiations with Chile and Peru aimed at securing copper concentrate supplies. While tightening copper supplies from key exporters such as Indonesia have limited India's sourcing options, Chile and Peru already have long-term commitments with major global buyers like China, further narrowing India's import choices, it said. The government also wants the state-run Khanij Bidesh India Ltd to secure supplies of strategic minerals from overseas and explore copper assets in Chile, Peru, Australia, Mongolia, and other countries, the document said. India could also become more vulnerable to supply chain disruptions as leading suppliers of mineral resources resort to "resource nationalism", it said. China placed export restrictions on rare earth elements in April, squeezing supply of minerals used in weapons, electronics and a range of consumer goods. This trend underscores "an urgency for foreign asset acquisition", the document said. https://www.reuters.com/world/china/india-plans-steps-counter-rising-copper-supply-risks-2025-06-25/
2025-06-25 12:16
June 25 (Reuters) - Pipeline operator Energy Transfer (ET.N) , opens new tab said on Wednesday it will supply U.S. oil major Chevron (CVX.N) , opens new tab with an additional 1 million tonnes per annum (mtpa) of LNG from its Lake Charles LNG export facility. The 20-year agreement brings the total volume of LNG supply contracted by Chevron to 3 mtpa, following the initial 2 mtpa agreement signed last year. Sign up here. Energy Transfer said it will supply the super-chilled gas on a free-on-board basis, adding that the purchase price will consist of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark. The agreement is subject to Energy Transfer reaching a positive final decision. https://www.reuters.com/legal/litigation/energy-transfer-expands-its-lng-supply-agreement-with-chevron-2025-06-25/
2025-06-25 12:14
TRIPOLI, June 25 (Reuters) - Libya's National Oil Company (NOC) had signed a memorandum of understanding with Turkish state oil company TPAO to conduct a geological and geophysical study of four offshore areas, NOC said on Wednesday. "Discussions were also held regarding conducting a two-dimensional seismic survey (10,000 km long), and processing the data resulting from these surveys within a period not exceeding 9 months," Libya's state oil firm said in a statement. Sign up here. NOC said the agreement was signed in Istanbul by the two companies' executives., It provided no further details. https://www.reuters.com/business/energy/libya-turkey-sign-geological-geophysical-mou-four-offshore-areas-noc-says-2025-06-25/
