2025-06-18 19:26

Hurricane Erick rapidly strengthens into Category 3 Storm to make landfall early Thursday on Mexico's Pacific Coast Emergency planning underway in both affected states MEXICO CITY, June 18 (Reuters) - Hurricane Erick strengthened rapidly into a major Category 3 hurricane on Wednesday as it churned toward Mexico's southern Pacific Coast, where it is expected to make landfall early Thursday, authorities said. Erick is expected to bring potentially destructive winds and life-threatening flash flooding to parts of southern Mexico tonight and Thursday, the U.S. National Hurricane Center said in a report. Sign up here. "A hurricane hunter aircraft reports that Erick is a major hurricane," the NHC said in its latest update at 6 p.m. CST (2300 GMT). Erick will be the first hurricane to make landfall in Mexico this hurricane season, which runs from May to November. Forecasters predict an above-average active season, with between eight and 11 hurricanes, and four to six of those reaching major hurricane status. Scientists have warned that Erick could become the most intense hurricane to make landfall along Mexico's Pacific coast this early in the season. With maximum sustained winds of 195 kph (121 mph), Erick was located 90 km (about 56 miles) from the tourist enclave of Puerto Angel, where a hurricane warning is in effect and westward to the resort city of Acapulco. A Category 3 hurricane on the Saffir-Simpson scale has maximum sustained winds between 181 and 210 kph (112-130 mph) and is considered extremely dangerous and capable of causing devastating damage. EMERGENCY PREPARATIONS Up to 16 inches (about 41 cm) of rain is expected to hit the states of Oaxaca and Guerrero, according to NHC. Both states have begun emergency planning and taken preventive actions with local authorities. Over 18,000 first responders have been deployed and over 500 temporary shelters have been activated, according to authorities. Mexican authorities are also coordinating evacuation and care efforts for tourists in popular beach destinations, including Acapulco, which is still hurting from Hurricane Otis' devastation , opens new tab in October 2023. Acapulco's international airport announced on its X account that all flights scheduled for Thursday had been suspended. Mexican President Claudia Sheinbaum urged residents to stay indoors and move to shelters if they are in flood-prone areas. Mexico's national water commission, Conagua, warned rainfall in coastal areas could trigger landslides and flooding, with waves reaching up to 6 meters (20 feet) high. https://www.reuters.com/business/environment/erick-becomes-hurricane-off-mexicos-pacific-coast-2025-06-18/

2025-06-18 19:08

June 18 (Reuters) - Federal Reserve Chairman Jerome Powell cautioned on Wednesday not to place too much stock in the central bank's interest rate forecasts, which could change based on incoming data, especially on the inflation front. On a day when the Fed reiterated its expectation that its short-term interest rate target will be lowered twice this year, Powell said at a press conference following Fed's policy meeting that “no one holds these...rate paths with a great deal of conviction, and everyone would agree that they're all going to be data dependent.” Sign up here. Powell also said, "Every outside forecaster and the Fed is saying, is that we expect a meaningful amount of inflation to arrive in coming months, and we have to take that into account." https://www.reuters.com/business/feds-powell-cautions-little-conviction-forecasted-rate-outlook-2025-06-18/

2025-06-18 18:44

Circle closes up 33.8%, Coinbase and Robinhood also gain Senate passes stablecoin bill with rare bipartisan support Market eyes House vote and possible passage by end of summer Legislation seen as turning point for crypto oversight June 18 (Reuters) - Shares of stablecoin issuer Circle (CRCL.N) , opens new tab and crypto exchange Coinbase (COIN.O) , opens new tab surged on Wednesday after the U.S. Senate passed a landmark stablecoin bill, boosting hopes of wider adoption for a once-niche part of the crypto sector. The bill was passed with bipartisan support, marking a turning point in the debate over crypto oversight, and a breakthrough for a sector long stuck in regulatory limbo. Sign up here. The tokens have gained traction for offering crypto's convenience without its volatility. Pegged to currencies like the U.S. dollar, they aim to hold a stable value backed by reserves. Circle shares closed up 33.8%. Coinbase ended 16% higher, while commission-free brokerage Robinhood (HOOD.O) , opens new tab, which offers crypto trading, gained 4.5%. The Republican-controlled House of Representatives must pass its version of the bill, known as the GENIUS Act, before it heads to President Donald Trump for approval. "Once passed into a law (likely by the end of summer), we expect stablecoins to evolve from the money rail of crypto to the money rail of the internet," analysts at brokerage Bernstein said. Circle, the issuer of the second-largest stablecoin by market value, went public earlier this month in a blowout debut on the New York Stock Exchange. Its shares closed at $199.59 versus IPO price of $31. The stock was last up another 4.4% after the bell. The company's flagship USDC stablecoin has a market value of around $61.4 billion, according to data from CoinGecko. Circle co-founded USDC in partnership with Coinbase. The token underpins much of the crypto exchange's stablecoin revenue, which jumped nearly 51% in the first quarter as USDC's market value hit a record high. The stablecoin legislation is one of two major crypto bills that industry supporters hope to have signed into law this year, analysts at Barclays said. GAINING MOMENTUM Proponents say by setting clearer rules for issuing and managing dollar-pegged tokens, the bill could bring greater legitimacy to the sector. Several high-profile corporates are also reportedly exploring launching their own stablecoins. "History is being made," Circle CEO Jeremy Allaire said in a post on social media platform X, adding that he expects the legislation will "drive U.S. economic and national competitiveness for decades to come." If signed into law, the GENIUS Act could unlock fresh growth in the $256 billion stablecoin market and boost revenue for digital asset infrastructure firms such as Circle and Coinbase. "While stablecoin demand is already impressive, the new bill advancing through Congress can accelerate that demand," said Andrew Rocco, stock strategist at Zacks Investment Research. "The bill would finally put a regulatory framework around issuing and operating stablecoins, lending credibility to the industry." If signed into law, stablecoins will have to be backed by liquid assets such as the dollar and short-term Treasury bills. Issuers will also have to publicly disclose the composition of their reserves on a monthly basis. "Stablecoin adoption could also serve as a strong tailwind for major cryptocurrencies like bitcoin," analysts at brokerage KBW said. https://www.reuters.com/business/circle-surges-us-senate-clears-path-stablecoin-regulation-2025-06-18/

2025-06-18 16:36

WASHINGTON, June 18 (Reuters) - U.S. President Donald Trump on Wednesday knocked Federal Reserve Chair Jerome Powell for what he expected would be a decision not to lower interest rates and said the man he put in the role during his last term had done a poor job. Trump, speaking to reporters at the White House, mused about appointing himself to lead the U.S. central bank, based on his dissatisfaction with Powell. Sign up here. "Maybe I should go to the Fed," Trump said. "Am I allowed to appoint myself at the Fed? I'd do a much better job than these people." Trump has long criticized Powell and sparked market concern earlier this year when he suggested the central bank chief's termination couldn't come fast enough. Trump has since walked back from that rhetoric, saying he would not fire Powell before his term as chair ends next year, but he has not held back on his broader criticism and has made clear that he will not ask Powell to stay on as the central bank's leader. "What I'm going to do is, you know, he gets out in about nine months, he has to, he gets fortunately terminated ... I would have never reappointed him, (President Joe) Biden reappointed him. I don't know why that is, but I guess maybe he was a Democrat... he's done a poor job," Trump said. The Federal Reserve is expected to keep interest rates unchanged on Wednesday as its policymakers weigh signs of a cooling economy, the risk of higher inflation from U.S. import tariffs, and the escalating crisis in the Middle East. Trump expressed disappointment in advance of the decision and underscored his belief that the Fed had been too late at cutting rates. "I call him 'too late Powell' because he's always too late. I mean, if you look at him, every time I did this I was right 100%, he was wrong," Trump said. https://www.reuters.com/world/us/trump-knocks-feds-powell-muses-about-appointing-himself-lead-central-bank-2025-06-18/

2025-06-18 16:14

High interest rates, tariffs, and geopolitical issues slow M&A Capital tie-up creates tug of war between PE and LPs for profit IPO market revives with 31 IPOs raising $11 billion by May 2025 NEW YORK, June 18 (Reuters) - Private equity firms are holding about $1 trillion in unsold assets, PricewaterhouseCoopers (PwC) said on Wednesday — capital that, in a typical market environment, would have been returned to investors. High interest rates in the United States, President Donald Trump’s on-again, off-again approach to tariff policy, and geopolitical uncertainties have eroded company valuations and contributed to firms holding onto portfolio firms far longer than expected. Sign up here. The capital tie-up is playing a role in the slowdown in dealmaking. Mergers and acquisitions, a key barometer of global economic health, have stalled this year. "Patience is wearing a little bit thin" among limited partners (LP), said Kevin Desai, PwC U.S. deal platform leader. LP firms combine some of the largest and most influential investors in the world and invest trillions of dollars in PE firms in expectation of regular returns. Despite entering 2025 with high hopes for an M&A rally under Trump, deal volume and value have remained largely flat year-over-year, with 4,535 deals totaling $567 billion through May, PwC said. PwC’s May 2025 Pulse Survey found that 30% of respondents have paused or are revisiting deals due to tariff issues, fueling investor frustration over delayed returns. "In a typical M&A cycle, $1 trillion would have already been put back into the market,” Josh Smigel, PwC’s U.S. private equity leader, told reporters while disclosing the firm's 2025 midyear outlook on deal activity. Private equity firms, which deploy LP capital into businesses across industries, currently have $3 trillion invested in 30,000 companies, according to PwC, with 30% held for longer than five years. That is above the traditional timeline by which funds expect to have a profit on their investments. Earlier, these firms could easily hit their rate of return targets by using cheap debt and favorable market conditions. A separate PwC study found 57% of executives, who poured capital into businesses that needed to be fixed, saw the investments shrink or stay the same. So, now, PE firms need to be creative to squeeze profit from assets - often bought at peak prices, said Liz Crego, PwC's industry markets leader. That includes selling a small portion of a business that can be more valuable as a separate entity, she said. A more uncertain market has also led to a decline in cross-border deals to 16.9% of total activity, down from 18.7% in 2021. China-related deals, in particular, face heightened scrutiny and strategic reevaluation, PwC said. CAUTIOUSLY OPTIMISTIC The initial public offering (IPO) market has shown signs of life, with 31 traditional IPOs raising $11 billion through May. While April saw a pause due to tariff shocks, activity resumed in May and June, with fintechs like Chime, valued at $18.4 billion at its Nasdaq debut, leading the charge. Special purpose acquisition companies (SPACs) are also making a modest comeback, with over 50 of those publicly traded shell companies created to raise capital through IPOs. To unlock the $1 trillion held by PEs, the recession cloud over the U.S. would have to recede, Washington would need to provide clarity over tariffs and interest rates must decline, Smigel said. Nevertheless, PwC expects M&A activity to improve in the coming quarters, with pressure from the LP funds looking for returns and as assets are repriced. "Whether that is the back half of 2025 and into 2026, there are reasons to be optimistic," Smigel said. https://www.reuters.com/business/private-equity-sits-1-trillion-amid-uncertainties-ma-stalls-pwc-says-2025-06-18/

2025-06-18 12:48

WASHINGTON, June 18 (Reuters) - U.S. single-family homebuilding increased in May, but a sharp drop in permits for future construction pointed to subdued housing market conditions amid headwinds from tariffs and excess inventory of unsold homes. Single-family housing starts, which account for the bulk of homebuilding, rose 0.4% to a seasonally adjusted annual rate of 924,000 units last month, the Commerce Department's Census Bureau said on Wednesday. Sign up here. President Donald Trump's import duties, including on lumber, aluminum and steel are raising construction costs for builders. The tariffs have heightened uncertainty over the economy, which the Federal Reserve has responded to by pausing its interest rate cutting cycle. The U.S. central bank is later on Wednesday expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Higher borrowing costs have sidelined potential buyers, boosting the supply of new single-family homes on the market to levels last seen in late 2007. A National Association of Home Builders survey on Tuesday showed sentiment among single-family homebuilders plummeted to a 2-1/2-year low in June. The NAHB reported an increase in the share of builders cutting prices to lure buyers, and forecast a decline in single-family starts this year. Permits for future construction of single-family housing dropped 2.7% to a rate of 898,000 units in May. Residential investment, which includes homebuilding, contracted slightly in the first quarter after rebounding in 2024 following steep declines in the prior two years caused by a surge in mortgage rates. "We appear on course for a substantial decline in real activity in the current quarter and perhaps further weakness in the summer," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets. https://www.reuters.com/business/us-single-family-housing-starts-rise-may-permits-slump-2025-06-18/