2025-03-19 05:08
Fed doesn't change rates, will slow pace of balance sheet reduction US rate futures price in two rate cuts in 2025, tracking Fed forecast Turkish lira plunges to record low Yen up as BOJ stands pat on rates NEW YORK, March 19 (Reuters) - The dollar pared gains against the euro on Wednesday, after the Federal Reserve held interest rates steady as expected, but indicated policymakers expect to cut borrowing costs by half a percentage point by the end of this year. Policymakers projected likely two quarter-point interest-rate cuts later this year, the same median forecast as three months ago, even as they forecast slower economic growth and higher inflation. Sign up here. Federal Reserve Chair Jerome Powell on Wednesday said uncertainty at present is "unusually elevated" as he described the challenges central bank officials faced in arriving at new projections for the economic outlook amid the wave of new policy maneuvers by the Trump administration. Taking stock of the Trump administration's rollout of tariffs, Fed officials actually marked up their outlook for inflation this year, with their preferred measure of price increases expected to end the year at 2.7% versus the 2.5% pace anticipated in December. The Fed targets inflation at 2%. The Fed also said it will slow the ongoing drawdown of its balance sheet, known as quantitative tightening. "The dollar's moved off of this is pretty calm, all things considered," Helen Given, director of trading at Monex USA, said. "I think that has to do with the fact that no one really wants to get caught on the wrong side of any trade," Given said. The buck has sold off about 6% against the euro since mid-January as investors grew concerned over the economic fallout of President Donald Trump's policies on trade and tariffs. While the U.S. currency has steadied in recent sessions, the near-term outlook for the currency hinges on the strength of incoming economic data. "I think that we're probably going to be kind of floating around here until we get some firm first-quarter GDP data ... that's going to be a really big tell for traders as to whether this economic weakness that everyone's worried about, it's fully materializing," Given said. Against the dollar, the euro was down 0.3% to $1.0912 after slipping as low as $1.0860, earlier in the session. Futures on the federal funds rate, which measures the cost of unsecured overnight loans between banks, priced in 64 basis points of easing this year, or about two rate reductions, in line with what the Federal Reserve projected in its rate forecasts released on Wednesday. "A lot will depend on how the inflation-versus-growth trade-off develops—growth may continue weakening, and the Fed may need to cut rates more forcefully than expected," Matthias Scheiber, head of the multi-asset solutions team at Allspring Global Investments in London. The buck found some support earlier in the day from a brief jump in volatility after authorities detained Turkish President Tayyip Erdogan's main political rival, knocking the lira by about 12% to a record low. The Turkish lira plunged amid political turmoil in Turkey. Istanbul mayor Ekrem Imamoglu was detained on charges of corruption and aiding a terrorist group in what the main opposition party called "a coup against our next president." The dollar was last up 3.6% against the lira at 37.97, after rising to a record high of 42, earlier in the session. The U.S. currency was 0.3% lower against the Japanese yen at 148.85, after the Bank of Japan held interest rates steady earlier on Wednesday. The widely expected BOJ decision underscored policymakers' preference to spend more time gauging how mounting global economic risks from higher U.S. tariffs could affect Japan's fragile recovery. "For now, the BOJ appears content to bide its time, having last raised rates two months ago. With inflation trends broadly tracking the bank’s forecasts, the consensus among economists is that the next move may not come until June or July," Fawad Razaqzada, Market Analyst at City Index, said in a note. Meanwhile, bitcoin , the world's largest cryptocurrency by market cap, rose 4.6% to $85,802. https://www.reuters.com/markets/currencies/yen-steady-dollar-dithers-traders-await-boj-fed-decisions-2025-03-19/
2025-03-19 04:30
JAKARTA, March 19 (Reuters) - Operations are normal at Indonesia's largest nickel processing complex, the Morowali industrial park on the eastern island of Sulawesi, despite floods this week, a company spokesperson said on Wednesday. Tens of thousands of workers are employed by dozens of companies in the industrial park, sprawling over 3,000 hectares (7,400 acres), that produced about a fifth of Indonesia's nickel pig iron last year, according to mining association data. Sign up here. Dedy Kurniawan, a spokesperson of the company that runs the park, said four hours of heavy rain on Monday flooded an area of the park where new plants are being built. "The floods did not halt plants' operations," he said, adding that construction work on the new plants had also returned to normal. Indonesia's nickel processing industry has experienced several fatal incidents in recent years. In December 2024, a fire killed 13 workers and injured 46 at a nickel smelter furnace owned by Indonesia Tsingshan Stainless Steel (ITSS) in the park. https://www.reuters.com/world/asia-pacific/indonesias-largest-nickel-processor-morowali-unscathed-by-floods-2025-03-19/
2025-03-19 04:16
March 18 (Reuters) - Tariff escalation and high spare capacity skew medium-term risks to Goldman Sachs' oil price forecast to the downside, the bank said. "While we reduced our Brent forecast range by $5/bbl to $65-80, we expect oil prices to edge up in coming months, and think that market pricing of volatility and of the upside risk from potentially lower sanctioned supply remains too low," the bank said in a note dated Tuesday. Sign up here. Goldman Sachs said that Brent prices recovered slightly from the high $60s to just over $70, given mixed geopolitical developments, but oil markets remain focused on price downside. On the negative side for prices, the Kremlin backed the idea to not hit Ukraine's energy infrastructure for 30 days, and the U.S. said talks for a full ceasefire would start immediately, potentially incrementally reducing the probability of a near-term tightening in Russia sanctions, they said. Oil prices slid after Russia agreed to U.S. President Donald Trump's proposal that Moscow and Kyiv stop attacking each other's energy infrastructure temporarily, which could lead to more Russian oil entering global markets. Brent crude futures were down 12 cents, or 0.2%, at $70.44 a barrel by 0106 GMT. U.S. West Texas Intermediate crude (WTI) lost 15 cents, or 0.2%, to $66.75. https://www.reuters.com/business/energy/goldman-sachs-sees-downside-risk-oil-price-view-amid-tariffs-spare-capacity-2025-03-19/
2025-03-19 04:08
SINGAPORE, March 19 (Reuters) - Economists expect Singapore to grow 2.6% this year, near the midpoint of the government's forecast range, a survey by the central bank published on Wednesday showed, with geopolitical and trade tensions seen as the biggest downside risks. The median forecast for 2025's growth came from 20 economists surveyed last month by the Monetary Authority of Singapore (MAS), and was unchanged from the December quarter survey. Singapore's economy grew 4.4% in 2024. Sign up here. The trade ministry has estimated the economy will grow between 1.0% and 3.0% this year. The MAS loosened monetary policy in January on the back of expected slower inflation and growth this year. Less than one-fifth of economists saw the central bank easing policy again at its April review, while about 30% anticipate a policy change at the review in July, the survey showed. Headline inflation and core inflation for 2025 were forecast at 1.7% and 1.5%, respectively, both lower than the median forecasts in the previous survey. The MAS has forecast core inflation will average 1.0% to –2.0% in 2025. In January, the annual core inflation rate was 0.8%, the lowest rate in more than three years. The survey was conducted in mid-February, after the release of fourth-quarter GDP data. https://www.reuters.com/markets/asia/economists-see-singapores-2025-growth-26-central-bank-survey-shows-2025-03-19/
2025-03-19 04:00
March 18 (Reuters) - A U.S. judge on Tuesday temporarily blocked the U.S. Environmental Protection Agency from recovering grant funds issued as part of a $20 billion climate funding program that President Donald Trump's administration has moved to terminate. U.S. District Judge Tanya Chutkan in Washington issued a temporary restraining order , opens new tab halting the EPA's termination of three environmental nonprofit groups' grant agreements and barring Citibank from dispersing grant funding held at the bank in their accounts. Sign up here. Those grants were terminated as part of EPA Administrator Lee Zeldin's campaign to claw back money from the Greenhouse Gas Reduction Fund, which Congress authorized in 2022 as part of the Inflation Reduction Act during then President Joe Biden's tenure in 2022 to kick-start projects aimed at curbing pollution. The EPA under Zeldin's watch has maintained the program did not align with the agency's priorities, and it cited concerns with potential fraud, waste and abuse. The EPA has said the FBI and Justice Department are also investigating the program, including for potential fraud, waste and abuse. But Chutkan said it appeared the EPA failed to take the legally required steps necessary to terminate $13.97 million of grants awarded to Climate United, Coalition for Green Capital and Power Forward Communities. Chutkan said that while the EPA claimed it terminated them due to "substantial concerns" about fraud, waste and abuse, it provided only "vague and unsubstantiated assertions" to back up those claims. Absent a court order preserving the status quo as the litigation proceeds, Chutkan said those groups would face imminent harm if Citibank transferred money the groups use to pay employees, pay rent and fund projects out of those accounts. "If Citibank transfers money out of these accounts, the funds will not be recoverable," wrote Chutkan, an appointee of former Democratic U.S. President Barack Obama. Zeldin in a statement said he would not rest until the funds were returned to the U.S. Treasury, saying they were "riddled with self-dealing and wasteful spending." Citigroup, (C.N) , opens new tab Citibank's parent company, did not respond to a request for comment. The decision was an initial victory for the nonprofits, who sued earlier this month over the EPA's termination of their grants and Citibank's withholding of the money. Climate United CEO Beth Bafford in a statement called Tuesday's ruling "a strong step in the right direction," and said the organization would work in the coming weeks towards a long-term solution. https://www.reuters.com/legal/us-judge-blocks-trumps-epa-clawing-back-climate-grants-2025-03-19/
2025-03-19 03:23
BOGOTA, March 18 (Reuters) - Colombian Finance Minister Diego Guevara announced his resignation on Tuesday, amid clashes over budget cuts and just hours after lawmakers rejected a labor reform championed by leftist President Gustavo Petro. Analysts say Guevara's exit, after just over three months in the role, underscores uncertainty about the future of Colombia's deeply-troubled public finances. Sign up here. Guevara, who had a previous stint as vice finance minister, revealed his decision in a post on X, saying he had a "calm and friendly" conversation with Petro, but gave no reason why. A source from the presidential palace said Petro and Guevara disagreed over budget cuts and Guevara resigned on Monday night. Petro, the South American nation's first leftist leader, has recently replaced 12 of his 19 ministers. Radio station Caracol said Guevara is to be replaced by German Avila, the head of Grupo Bicentenario, a holding company created six years ago of firms in which the government holds a stake. Avila may lack the experience to successfully manage public finances, however, Banco de Bogota wrote in a note. "The constant changes in the cabinet and the profile of the incoming minister will increase political and economic instability," it said. The finance ministry's latest leadership shakeup would stoke doubts over an expected cut in the central bank's benchmark interest rate, it added. The Colombian peso closed down slightly more than 1% on Tuesday before the news, weakening to 4,118 against the U.S. dollar. This month, Guevara said the government was considering a fresh delay to budget spending this year, as it tackles fiscal difficulties that have already forced spending reductions. https://www.reuters.com/world/americas/colombias-finance-minister-leave-role-local-media-reports-2025-03-18/
