2025-06-23 22:27

BUENOS AIRES, June 23 (Reuters) - Argentina's economy grew year-on-year for the second consecutive quarter and by the most since 2022 as the economy recovers from last year's recession while still facing some headwinds, official data showed on Monday. Gross domestic product expanded 5.8% in the first quarter compared to the same quarter in 2024, when the economy was rattled by President Javier Milei's December 2023 peso currency devaluation and subsequent austerity drive. Sign up here. Monday's data showed signs of recovery at the consumer level, with private consumption growing 11.6% from a year ago. Milei in a post on X called the data "a fantastic result," while criticizing reports focusing on a dip in public sector consumption. Analysts polled by Reuters had forecast GDP growing at a higher 6.1%, according to the poll's median estimate. But the rate is still the largest expansion since the third quarter of 2022, when the economy was rebounding from COVID-19 pandemic-related losses. Compared to the fourth quarter of 2024, GDP expanded 0.8% in seasonally adjusted terms, a slowdown from the two prior quarters. Exports in the agricultural powerhouse grew 7.2%, which Economy Minister Luis Caputo said in a post on X was a first-quarter record. Still, imports surged 42.8%, dulling the exports boost's impact. Argentina's economy emerged from a painful recession in the second half of last year, and economists have waited to see whether the recovery would consolidate in 2025. While Milei has won plaudits for stabilizing the state's finances, his tough austerity drive weighed on economic activity in the first months of 2024. Cuts to state spending continue to hit public workers hard, with salaries falling behind inflation. The central bank's latest market expectations survey of analysts forecasts GDP growing 5.2% this year. https://www.reuters.com/world/americas/argentinas-economy-expands-58-q1-year-on-year-2025-06-23/

2025-06-23 21:32

Bowman says open to July rate cut if inflation contained More dovish outlook represents a shift for Fed's top bank overseer Wall St ends higher, US Treasury yields fall on rate-cut hopes Goolsbee supports rate cut if no tariff inflation Bowman less worried tariffs will drive up inflation NEW YORK, June 23 (Reuters) - Federal Reserve Vice Chair for Supervision Michelle Bowman, recently tapped by President Trump as the U.S. central bank’s top bank overseer, said Monday the time to cut interest rates is getting nearer as risks to the job market may be on the rise. “It is time to consider adjusting the policy rate,” Bowman told a gathering held in Prague, Czech Republic. The official's shift was unexpected as she had in recent months appeared skeptical of the need to ease monetary policy. Sign up here. Bowman said inflation appears to be on a sustained path back to 2% and she said she expects “only minimal impact” on inflation from trade policy. “Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said. She noted the job market is still in a good place but that she is also increasingly worried about rising risks to the sector and said that such concerns might need to take more prominence in thinking about the outlook. “We should also recognize that downside risks to our employment mandate could soon become more salient, given recent softness in spending and signs of fragility in the labor market,” Bowman said. The central banker's comments on the interest rate outlook caught the attention of financial markets, where stock prices got a hop and futures markets bolstered what are still low odds the central bank will cut rates when the rate-setting Federal Open Market Committee meets at the end of July. Futures markets still believe rate cuts will start at the September policy meeting. Bowman's dovish take on monetary policy was followed later in the day by Chicago Fed President Austan Goolsbee. The policymaker said that while tariffs carry big risks to the economy in the form of higher inflation and lower growth, which are very tricky for monetary policy to address, thus far some of his stronger worries have not been realized. "Somewhat surprisingly, thus far, the impact of tariffs has not been what people feared" when huge tariffs were announced at the start of April, Goolsbee said in comments before the Milwaukee Business Journal Mid-Year Outlook. The policymaker said that if the economy can get through this period of turbulence and uncertainty, the path toward rate cuts may open up again. "If we do not see inflation resulting from these tariff increase, then, in my mind, we never left what I was calling the golden path," and that's a path that until recently heralded cuts in short-term borrowing costs, Goolsbee said. The official described tariffs as throwing "dirt" in the air and said of that uncertainty, "if the dirt is out of the air, then I think we should proceed" with rate cuts. STEADY STATE Last week, the FOMC left its overnight target-rate range fixed between 4.25% and 4.5%. Officials remained in a wait-and-see mode amid the considerable economic uncertainty created by President Donald Trump’s erratically implemented trade policy. Most Fed officials are worried surging import taxes could depress growth while restarting what had been cooling inflation pressures. That said, they continue to pencil in two rate cuts for this year. Even with Trump's retreat on the most extreme tariff levels, the overall level of his current import taxes, which are currently facing a court challenge, is higher than anything Americans have seen in many years. "Increases in tariffs this year are likely to push up prices and weigh on economic activity," Fed Chairman Jerome Powell said on Wednesday following the FOMC meeting. "It takes some time for tariffs to work their way through," Powell noted, while adding that when it comes to the tariffs "we're beginning to see some effects, and we do expect to see more of them over coming months." Bowman said in her speech that she supported the Fed’s decision to hold steady. But she also noted that she sees far fewer storm clouds ahead for the economy with more clarity arriving for the outlook. Bowman’s openness to cutting rates soon is joined by that of Fed Governor Christopher Waller, who said in a television interview on Friday he would also consider a rate cut at the July 29-30 meeting. Waller is widely considered to be in the running to succeed Powell, whose term ends next year. Trump has repeatedly pressured the Fed to pursue very large rate cuts akin to those taken in times of crisis amid regular insults to Powell. Observers believe any Fed chair would need to align with Trump’s desire for much lower short-term borrowing costs, although doing so could put the Fed's inflation fighting credibility at risk. Goldman Sachs economists said in a note that the next few months will be telling for the price pressure outlook, telling clients in a note on Monday that "we expect the largest tariff effects on monthly inflation to show up from June through August." Bowman was also quite sanguine on the inflation outlook, saying “it appears that any upward pressure from higher tariffs on goods prices is being offset by other factors and that the underlying trend in core (Personal Consumption Expenditures) inflation is moving much closer to our 2% target than is currently apparent in the data.” She also said Trump's policy mix is likely to have a positive impact on the outlook. "Less restrictive regulations, lower business taxes, and a more friendly business environment will likely boost supply and largely offset any negative effects on economic activity and prices," Bowman said. https://www.reuters.com/business/feds-bowman-open-cutting-rates-july-policy-meeting-2025-06-23/

2025-06-23 21:27

USDA to rescind Clinton-era ban on mining, logging and roads in pristine national forests Agency cites need to manage forests due to increase in wildfires Environmental group says roads increase fire risk June 23 (Reuters) - The U.S. Department of Agriculture will rescind a Clinton-era policy that banned logging, roads and mining in undeveloped forests so it can manage those lands for fire risks, the agency said on Monday, a move opposed by environmentalists. The change will allow nearly 59 million acres (23.9 million hectares) of federal forest lands to be better managed for fire risk, the USDA said. Sign up here. The move is aligned with President Donald Trump's goal to lift environmental regulations that he says are roadblocks to industry. Agriculture Secretary Brooke Rollins announced the rescission of the 2001 Roadless Rule during an appearance at the Western Governor's Association meeting in Santa Fe. "After the repeal of this rule, we are going to go back to common-sense forest management to ensure our forests are here for generations to come," Rollins said during a press briefing at the meeting. The U.S. Forest Service is a division of the Department of Agriculture. The Roadless Rule impacts about 30% of Forest Service lands, according to USDA. It is not the first time Trump has sought to roll back the policy. In 2020, his administration exempted Alaska's Tongass forest from the Roadless Rule, a move that was reversed by President Joe Biden in 2023. The Tongass is the largest U.S. national forest. USDA said the move will allow the lands to be managed at the local level. About 60% of forest lands in states including Utah and Montana are restricted from road development because of the Roadless Rule, USDA said. "This misguided rule prohibits the Forest Service from thinning and cutting trees to prevent wildfires," Rollins said in a speech at the meeting, adding that the average acreage of U.S. forest burned each year by wildfires has doubled since the rule was implemented 30 years ago. New Mexico Governor Michelle Lujan Grisham pushed back at Rollins' characterization of the Roadless Rule driving the increase in wildfire acreage over the past three decades. "Climate change is the biggest problem in fuel and these damaging fires," Lujan Grisham told the meeting of western governors, to applause from the audience. Environmental group Earthjustice criticized the rule, saying wildfires are more likely to start in landscapes that have roads. “The roadless rule has protected 58 million acres of our wildest national forest lands from clearcutting for more than a generation. The Trump administration now wants to throw these forest protections overboard so the timber industry can make huge money from unrestrained logging," Drew Caputo, Earthjustice's vice president of litigation for lands, wildlife and oceans. "These are lands that belong to all Americans, not the timber industry." https://www.reuters.com/legal/litigation/trump-administration-rescind-policy-protecting-undeveloped-forests-2025-06-23/

2025-06-23 21:26

SAO PAULO, June 23 (Reuters) - Iraq removed a trade ban it had imposed on Brazilian chicken meat after a bird flu case on a commercial farm last month, while South Korea eased its restrictions, the Brazilian Agriculture Ministry said on Monday. South Korea ow restricts only chicken meat from the region affected by the bird flu, the ministry said, without providing more details. Both Iraq and South Korea had imposed nationwide trade bans to Brazilian chicken meat. Sign up here. Brazil hopes to reverse trade bans after declaring last week itself free of the bird flu virus in commercial flocks following a 28-day period without any new commercial farm outbreaks. https://www.reuters.com/business/healthcare-pharmaceuticals/iraq-removes-south-korea-eases-restrictions-import-brazil-chicken-meat-2025-06-23/

2025-06-23 21:13

NEW YORK, June 23 (Reuters) - New York plans to build an advanced nuclear plant with the ability to produce at least 1 gigawatt of power, which would be one of the first new U.S. reactors in a generation, Governor Kathy Hochul said on Monday. U.S. nuclear power is experiencing a renaissance after decades of stagnation, spurred on by record electricity demand from the proliferation of energy-guzzling data centers and the electrification of industries like transportation and manufacturing. Sign up here. "We need electricity that is reliable all day long," Hochul said at a press conference. "Harnessing the power of the atom is the best way to generate steady zero-emissions electricity." New York plans to partially finance the nuclear plant and buy electricity from it. The projected cost of building the project has not been disclosed. The state is looking for partners in the project, which will be built in upstate New York, north of New York City, although the exact location and timeline for construction are still unclear. Hochul said she has directed the state's power authority to move forward with plans to site and eventually construct the nuclear build. The governor launched , opens new tab a Master Plan for Responsible Advanced Nuclear Development in January to gauge market interest in developing advanced nuclear energy technologies amid rising electricity demand. In late May, U.S. President Donald Trump signed executive orders directing the country's independent nuclear regulatory commission to cut down on regulations and fast-track new licenses for reactors and power plants. https://www.reuters.com/business/energy/new-york-plans-new-advanced-nuclear-power-plant-upstate-governor-says-2025-06-23/

2025-06-23 21:05

ORLANDO, Florida, June 23 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist Stocks flew, oil sank, and bond yields tumbled on Monday in a highly volatile start to the week, as traders digested Iran's response to the U.S. strikes on its nuclear sites and a string of dovish remarks from Federal Reserve officials. In my column today I ask a simple question, one which has several plausible answers: Who's selling the dollar? More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves All aboard the 'risk on' rollercoaster Early on Monday, oil prices were up 6% at a five-month peak on fears that Iran could seriously disrupt global crude supplies by closing the Strait of Hormuz. Several Middle East countries closed their airspace, and the dollar was rallying strongly. The reversal by the close of U.S. trading was remarkable - oil fell 7% and broke below its 200-day moving average, stocks closed firmly in the green and the dollar ended lower. What was the catalyst? There were probably two. The first was Tehran's response to Washington's attacks on its nuclear facilities on Saturday. Iran attacked a U.S. military base in Qatar, but took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz. Oil's stunning 13 percentage point swing on Monday was an indication of the premium that had been built into the price on fears that global supply could be disrupted. If supply is maintained, the collective sigh of relief will extend to businesses, households, and policymakers around the world. And this is where the second catalyst comes in - inflation expectations and monetary policy. Two Federal Reserve officials struck a dovish tone in their public remarks on Monday, Chicago Fed President Austan Goolsbee and Vice Chair for Supervision Michelle Bowman. They come on the heels of Governor Christopher Waller on Friday. Goolsbee and Waller are perhaps the two most dovish of all the Fed's 19 policymakers, while Bowman has for years been at the opposite end of the 'hawk-dove' spectrum. But on Monday she said she would consider voting for a rate cut as early as next month as long as inflation pressures remained contained. If the worst of the oil price spike has now been and gone - that's a big 'if', given how fragile and fluid the situation in the Middle East is - then disinflationary forces and soft growth and labor market dynamics could take on more significance for policymakers and investors alike. That's all very hypothetical at this stage, but Monday's sharp moves are an indication of where positioning and sentiment have been building in recent weeks. Next up is Fed Chair Jerome Powell, who delivers his semi-annual testimony to Congress on Tuesday and Wednesday. Will he nod to the Waller-Goolsbee-Bowman view, repeat the hawkish signals from last week's revised 'dot plot', or hold the narrowing middle line between the two? Who's selling? Breaking down the dollar's breakdown With the dollar poised for its worst first-half performance since 1986, the selling may seem to be coming from everyone, everywhere, across every asset class. To some extent, that's true. Investors globally appear to be gradually reducing their exposure to dollar-denominated assets, driving the greenback down to its lowest level against a basket of major currencies in three and a half years. But some pressure points are greater than others. Unsurprisingly, non-U.S. investors are responsible for the bulk of the selling, with equity-related selling pressure concentrated among European investors and fixed income-based selling mostly coming from Asia. According to Bank of America's FX strategy team, European "real money" investors - institutions like pension funds and insurance companies - are the main drivers of the dollar's selloff in the second quarter, slashing their dollar positioning to the lowest since 2022 in a matter of weeks. But the story might not be so straightforward. While European investors increasing their dollar hedge ratios have garnered much attention recently, research shows that most of the dollar's average daily declines in the last few months have come in Asian trading hours, suggesting Asian holders of U.S. bonds may also be increasing their dollar hedges. So which is the bigger drag on the dollar: equity-led geographic diversification or fixed income selling? And where is the selling mostly coming from: Europe or Asia? OVER-EXPOSED At first glance, one might pin the blame on equities, as foreign holdings of U.S. stocks are larger than their U.S. debt assets in nominal terms. But percentage-wise, overseas investors' footprint in the U.S. fixed income markets is larger. Foreigners own just over $31 trillion of U.S. securities, with $17.6 trillion in equities and $13.6 trillion of bond holdings, according to the Bank for International Settlements. That represents around 18% of the overall U.S. equity market, compared with 21% of the U.S. agency and corporate bond market and a third of the U.S. Treasury market. Analysts at UBS estimate that euro zone investors account for 25% of the foreign-owned U.S. equity universe, having loaded up on U.S. stocks in recent years. This makes the dollar particularly vulnerable if Wall Street continues to underperform European and Asian markets, they reckon. Breaking down these exposures even further, they find that foreign investors' total net unhedged dollar asset exposure is $23.5 trillion. Of this, investors in G10 countries hold $13.4 trillion, with $9.3 trillion in equities and $4.1 trillion in fixed income. These are vast numbers, and it wouldn't require much of a switch to trigger large cross-border flows. UBS calculates that a hypothetical 5% reduction in G10 countries' dollar position would equate to around $670 billion of dollar selling. Most G10 countries, of course, are in Europe, so the bulk of that selling would come from there. PRICE-SENSITIVE While European investors have mostly been unloading equities thus far, it's good to remember that the region's investors significantly increased their exposure to U.S. bonds over the last decade too, particularly the 2014-2022 years when the European Central Bank's main interest rates were negative. UBS analysts estimate euro zone investors bought $3.4 trillion in foreign debt since 2014. So even a modest rebalancing away from U.S. bonds could have a meaningful impact on prices. Ultimately though, Asian investors still appear to wield more muscle in the U.S. bond market, owning around a third of foreign-held U.S. Treasuries and agency debt. And that figure is probably much higher given that euro zone, Caribbean and UK holdings include assets held on behalf of Asian countries, notably China. Up until this point, there has been no wholesale dumping of U.S. assets, and neither is there likely to be. But it is notable that U.S. assets are increasingly being held by private sector investors, who have replaced central banks as the main buyers of U.S. assets in recent years. The private sector is typically considered more price-sensitive than the official sector. That means these positions may prove less sticky than in the past, especially if the idea of waning "U.S. exceptionalism" truly takes root. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/aerospace-defense/global-markets-trading-day-graphic-pix-2025-06-23/