2025-04-22 20:36
Kashkari says Fed's independence 'foundational' to economic success Rising Treasury yields, weak dollar may show global investors reassessing US investment, Kashkari warns Extreme uncertainty holding back spending, investment, though it could resolve quickly: Kashkari April 22 (Reuters) - Federal Reserve Bank of Minnesota President Neel Kashkari said on Tuesday it is too soon to know how short-term borrowing costs may need to be adjusted for U.S. President Donald Trump's tariffs and their expected impact on inflation and the economy. Kashkari's view is widely held by his colleagues and is likely to leave the Fed on hold at its rate-setting meeting in two weeks. Sign up here. "It's too soon to judge what's going to happen to the path of interest rates," Kashkari told the U.S. Chamber of Commerce Global Summit in Washington. While it is "logical" that tariffs alone would not reaccelerate inflation, recent high inflation means the Fed cannot ignore this risk, he said, noting that tariffs will likely also slow growth. That combination would create "tension" for the Fed, he said, since the U.S. central bank cannot fight rising inflation and rising unemployment at the same time. Complicating matters is the extreme uncertainty around U.S. trade policy, Kashkari said. This could be resolved quickly if trade negotiations result in agreements, but until then, that is keeping households and businesses from spending and investing, another knock to economic growth, he said. "There's a level of anxiety, again, I haven't seen since COVID hit," Kashkari said. Asked about Trump pressuring Fed Chair Jerome Powell to cut interest rates, Kashkari said monetary policy independence is "foundational" to U.S. economic success. He pushed back against the assertion by Trump and others in his administration that the Fed is making policy decisions for political reasons. Kashkari favored easier monetary policy during Democratic President Barack Obama's second term and Trump's first term, became hawkish during President Joe Biden's tenure, is now "probably some place in the middle" on policy, he noted. "My metamorphosis from dove to hawk to moderate, is that because of politics? No, that's because of the economic environment changing, the data changing." Kashkari previously ran as a Republican for governor of California, and worked for the Bush administration during the global financial crisis. Powell, he said, keeps the Fed's rate-setting committee laser-focused on the central bank's two goals of price stability and full employment - not politics. Additional pressure on the U.S. economy could come from the recent rise in Treasury yields and a weakening dollar, he said, as global investors reassess whether to keep investing in the United States, long the world's preeminent destination for capital. Reduced investment in the country would lower the trade deficit and raise borrowing costs for U.S. businesses and households over the long term, he said. This could limit the U.S. capacity to issue debt and reduce the dollar's standing as the world's reserve currency. "If we're no longer the economy that investors around the world say, hey, this is the preeminent competitive economy, then we probably have less runway," Kashkari said. "I hope that America maintains its preeminent position in the global economy and therefore the dollar would maintain its role of preeminence as well." https://www.reuters.com/business/feds-independence-foundational-better-economic-outcomes-kashkari-says-2025-04-22/
2025-04-22 20:28
LONDON, April 22 (Reuters) - Shares of British currency risk management company Argentex (AGFX.L) , opens new tab were suspended from trading on Tuesday after the company said its liquidity had significantly worsened due to the sharp fall in the U.S. dollar. Argentex, one of the financial firms hurt by the recent market turbulence, said it was considering several options for the business. Sign up here. Sky News reported later on Tuesday that Argentex is in advanced talks about an emergency sale with several parties, with London-based foreign exchange provider IFX Payments said to be among the contenders. A definitive deal could be announced as soon as Wednesday, Sky News said, citing banking sources. Argentex and IFX Payments did not immediately respond to requests for comment. Global markets have been wracked by volatility this month, as U.S. President Donald Trump's haphazard tariff policy has heightened uncertainty over the economy. "Argentex has been exposed to significant volatility in foreign exchange rates. ... As a result, (it) has experienced a rapid and significant impact on its near-term liquidity position," the company said in an exchange filing, adding this was partly due to margin calls linked to its FX forward and options books. The company, with a market capitalisation of $69 million, said it had the support of its principal liquidity provider and was looking to strengthen its position. "In the event that the volatility in currency markets worsens materially, then the company's financial liquidity position, if not strengthened in the near term, would be significantly stretched," Argentex said. The company has been particularly exposed to "the rapid devaluing of the U.S. dollar against other major benchmark currencies," it added. The dollar has hit a three-year low against a basket of major currencies (.DXY) , opens new tab and is set for its worst performance in the first four months of the year in 50 years, according to LSEG data. Analysts say the dollar has weakened as global investors sold U.S. assets due to worries about the health of U.S. companies and the economy. Argentex's stock has risen 50% so far this year. The company describes itself on its website as a "global expert in currency risk management and alternative banking", and offers clients strategies for hedging their currency risks as well as payment services. https://www.reuters.com/markets/europe/fx-firm-argentex-shares-suspended-after-volatility-induced-margin-calls-2025-04-22/
2025-04-22 20:24
April 22 (Reuters) - OpenAI CEO Sam Altman will step down as chairman of nuclear technology startup Oklo (OKLO.N) , opens new tab, paving the way for potential tie-up between the companies. The announcement send shares in Oklo down more than 11% in extended trading on Tuesday. Sign up here. Jacob DeWitte, Oklo CEO and co-founder, will take over the role of chairman, according to the company, which aims to develop its first small modular nuclear reactor by 2027. The startup will continue to "explore strategic partnerships with leading AI companies, including potentially with OpenAI," Caroline Cochran, Oklo co-founder, said in a statement. Oklo went public in the U.S. in May 2024 through Altman's special purpose acquisition company, AltC Acquisition Corp. After decades of stagnation, interest in nuclear power has surged as a clean and reliable energy source as the generative AI boom has driven up power consumption and companies globally try to move towards net-zero carbon emissions. In March, Oklo initiated a Pre-Application Readiness Assessment with the U.S. Nuclear Regulatory Commission (NRC) for its Aurora Powerhouse reactors to address the first phase of Oklo's combined license application submission for the reactors. In December, Oklo signed a non-binding agreement to provide power to Las Vegas-based data center operator Switch. https://www.reuters.com/business/energy/sam-altman-stepping-down-oklo-chairman-cnbc-reports-2025-04-22/
2025-04-22 19:43
SAO PAULO, April 22 (Reuters) - Brazil's 2025/26 coffee crop is forecast to decline by between 3% to 6.4% versus the previous cycle, mostly due to dry weather in 2024, according to two estimates published by different banks on Tuesday. Following a crop tour, Dutch bank Rabobank forecast Brazil's coffee output in the 2025/26 cycle would drop 6.4% to 62.8 million 60-kilogram bags, below the 67.1 million bags it forecast in the 2024/25 crop. Sign up here. Brazil's arabica coffee production is expected to decline significantly by 13.6% to around 38 million bags, Rabobank said, while robusta output is expected to offset some arabica underperformance by growing 7.3% to reach a record 24.7 million bags. "The dry weather in 2024 significantly affected flowering and, consequently, arabica coffee production. However, excellent yields are estimated for robusta coffee, despite a pessimistic outlook for the state of Rondonia," Rabobank said. Bank Itau BBA held its coffee production forecast at 64.4 million bags. The estimate is 3% lower than the Brazilian coffee output of 66.4 million bags for the 2024/25 cycle reported by the U.S. Department of Agriculture, which the bank used as its comparative base. "We continue to expect a 10% reduction in arabica production, to 40.9 million bags, and a 12% increase in robusta, totaling 23.5 million bags," the bank said. Harvesting of conilon coffee beans - a variety of robusta - for the 2025/26 crop has begun in some areas of Brazil's Espirito Santo and Bahia states, the Cooabriel cooperative said. https://www.reuters.com/markets/commodities/brazils-202526-coffee-output-forecast-decline-by-up-64-2025-04-22/
2025-04-22 19:33
BUENOS AIRES, April 22 (Reuters) - Argentina's economic activity rose 5.7% in February compared with the same month last year, notching its fourth consecutive month of year-on-year growth, official data showed on Tuesday. Latin America's third-largest economy has shown signs of a turnaround in the past few months, after being hit hard by libertarian President Javier Milei's tough austerity measures. Sign up here. Tuesday's reading showed activity accelerating at a slower pace compared with a revised 6.7% year-on-year expansion in January, but beating the 5.1% rise expected by analysts polled by Reuters. Eleven economic sectors expanded in February compared to the same month in 2024, led by financial services, up 30.2%, and fishing, up 28.3%. Financial services also had the biggest positive impact on the year-on-year variation, led by wholesale and retail, up 7.4%, and manufacturing, up 5.0%. On a month-on-month basis, economic activity increased 0.8% in February, the fifth consecutive monthly gain and a slight uptick from a revised 0.6% growth the prior month. https://www.reuters.com/world/americas/argentina-economic-activity-grows-57-february-2025-04-22/
2025-04-22 19:33
JP Morgan forecasts gold prices to exceed $4,000/oz by 2Q26 Central bank demand crucial for gold price stability, JP Morgan notes Silver faces near-term headwinds, expected to rise by 2025-end April 22 (Reuters) - JP Morgan sees gold prices crossing the $4,000 per ounce milestone next year, following increased recession probabilities amid boosted U.S. tariffs and an ongoing U.S.-China trade war, the bank said in a note on Tuesday. The bank now expects gold prices to reach an average of $3,675/oz by 4Q25, on the way towards above $4,000/oz by 2Q26, with risks skewed towards an earlier overshoot of these forecasts if demand surpasses its expectations. Sign up here. "Underpinning our forecast for gold prices heading towards $4,000/oz next year is continued strong investor and central bank gold demand averaging around 710 tonnes a quarter on net this year," the bank noted. Spot gold, which has gained 29% and hit 28 record highs this year, touched the $3,500 per ounce milestone for the first time on Tuesday. Earlier this month, Goldman Sachs raised its end-2025 gold price forecast to $3,700/oz from $3,300, noting that in "extreme tail scenarios," gold could plausibly trade near $4,500/oz by end-2025. In terms of a potential bearish case for gold, an unexpected drop off in central bank demand remains the biggest fundamental risk, the bank said. "More materially bearish would be a scenario where U.S. economic growth remains extremely resilient to tariffs allowing the Fed to turn much more proactive in fighting inflation risks, prompting markets to price in hikes even before worrying inflation actually arrives," analysts noted. JP Morgan also predicts greater headwinds for silver in the near-term given industrial demand uncertainty, while a "catch-up window" will open over the second half of 2025 with prices set to rise towards $39/oz by 2025-end. https://www.reuters.com/markets/commodities/jp-morgan-see-gold-prices-crossing-4000oz-by-q2-2026-2025-04-22/
