2024-03-25 18:33

NEW YORK, March 25 (Reuters) - Shares of Digital World Acquisition (DWAC.O) , opens new tab jumped more than 40% on Monday after the blank check company said it had completed its merger with the Trump Media & Technology Group (TMTG). TMTG owns social media platform Truth Social and is backed by former U.S. President Donald Trump. Digital World shareholders approved on Friday the merger with TMTG, allowing the deal to be completed and providing a windfall for Trump as he fights legal cases against him while contesting the 2024 U.S. presidential elections. Digital World shares rose as high as $51.80, up 40.2%, and recouping all losses from Friday's session, when it closed down 13.7%. The stock and warrants are set to begin trading on Nasdaq on Tuesday with tickers "DJT" and "DJTWW". It was last up 31% at $48.36. The deal delivers a $300 million cash infusion to Truth Social, which had lost $10.6 million from its operations in the first nine months of 2023 on revenue of $3.4 million. Trump, who is set to secure the Republican nomination for president, will own between 58.1% and 69.4% of the combined company. His stake was valued at about $3.3 billion after shareholders approved the deal on Friday. In another victory for Trump, a New York state appeals court on Monday allowed a pause to his $454 million civil fraud judgment if he posts a smaller $175 million bond within 10 days, a move that blocks any possible seizure of his assets by state authorities. But also on Monday, a New York Supreme Court judge fixed April 15 as the trial start date for Trump's criminal charges stemming from hush money paid to porn star Stormy Daniels. The date all but ensures that Trump will become the first former U.S. president yet to go on trial for criminal charges. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/digital-world-shares-surges-it-completes-merger-with-trumps-truth-social-2024-03-25/

2024-03-25 18:28

WASHINGTON, March 25 (Reuters) - Federal Reserve officials said on Monday they still had faith that U.S. inflation will ease, with housing price increases in particular expected to help pull down the headline pace of price increases, but also acknowledged an increased sense of caution around the debate. "Although housing-services inflation remains quite high, the current low rate of increase on new rental leases suggests that it will continue to fall," Fed Governor Lisa Cook told an event hosted by Harvard University in which she endorsed a "cautious" approach to easing monetary policy. In an interview with Yahoo Finance, Chicago Fed President Austan Goolsbee said the persistence of housing inflation continues to surprise him, but that he also felt it would ebb. Noting the slowed progress on inflation overall this year, after a steady decline in 2023, "the main puzzle has been about housing," Goolsbee said, a major component in the consumer spending basket that has accounted for a large share of recent headline inflation readings. "We've got to get housing inflation coming down closer to where it was before the pandemic," he said. "I do think the market rents show that there is progress to be made, but we have yet to see that in the overall data." The Fed last week held its benchmark overnight interest rate steady in the 5.25%-5.50% range, and in new quarterly economic projections showed the median policymaker still expects three quarter-percentage-point rate cuts this year. Goolsbee said he was in that median group, showing continued faith among Fed policymakers that inflation will decline enough in the coming months for the monetary policy easing to proceed. But the rhetoric and the substance of the debate have begun to shift since the steady decline of inflation last year gave way to a slower pace of progress. "We're in a little bit of a murky period," Goolsbee said, though in general he said he agreed with Fed Chair Jerome Powell's characterization last week that the overall "story" of a continued decline in inflation had not changed. "It doesn't feel to me like we've changed fundamentally the story that we're getting back to target," Goolsbee said, arguing that the months of steady inflation decline last year were probably not "just random." Others, however, have begun to have their doubts. In comments to reporters late Friday afternoon, Atlanta Fed President Raphael Bostic said he was "definitely less confident" than he was in December about continued progress on the inflation front, and had trimmed his policy outlook from two expected quarter-percentage-point cuts this year to just one. "We've got to stay on top of this to make sure we understand what these dynamics are," Bostic said, noting that the share of items with prices increasing by outsized rates were "reminiscent" of what was seen when inflation jumped to 40-year highs in 2021 and 2022. TREADING CAREFULLY Though investors still are betting the Fed will start cutting rates in June, policymaker projections issued last week showed a seeming drift towards less monetary easing this year. Though the median stayed the same, it did so only barely, with nine of 19 policymakers seeing a higher policy rate of interest at the end of 2024 than the 10 who determined the median. In addition, policymakers' risk assessments shifted slightly towards concern about higher inflation. New inflation data is due to be released on Friday. Asked whether he thought that data would confirm steady downward progress, Goolsbee said "well, it better, and let's hope we even start speeding up the improvement. We have to," given that current inflation is "well above our target." The personal consumption expenditures price index excluding food and energy, which the Fed considers a good indication of underlying inflation, rose 2.8% in January. Economists polled by Reuters expect it to have increased at the same pace in February. While Cook did not specify her policy expectations for the year, she agreed the Fed should tread carefully as it considers easing monetary policy. "The risks to achieving our employment and inflation goals are moving into better balance," she said. "Nonetheless, fully restoring price stability may take a cautious approach to easing monetary policy over time." Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/feds-cook-says-cautious-approach-needed-policy-easing-2024-03-25/

2024-03-25 15:52

BELFAST, March 25 (Reuters) - Bank of England policymaker Catherine Mann said on Monday that her position on the right level of interest rates had been finely balanced before her vote last week to keep them on hold. "The last time I gave a speech I said my vote was finely balanced," Mann said at an event at the Royal Economic Society's annual conference in Belfast. Mann last week joined the majority of the Monetary Policy Committee's members who kept Bank Rate at 5.25%, its highest since 2008. She had previously voted for an increase to 5.5%. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/uk/boes-mann-says-her-rates-view-was-finely-balanced-before-march-vote-2024-03-25/

2024-03-25 14:56

March 25 (Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee said on Monday that at the Federal Reserve's policy meeting last week he penciled in three rate cuts for this year. At that meeting, the U.S. central bank kept its benchmark overnight lending rate in a target range of 5.25%-5.5%, while the median estimate for interest rate reductions that policymakers projected for the year was three. "I was at the median for this one," Goolsbee said in an interview with Yahoo Finance, while declining to say when he thought an easing in borrowing costs might begin. Goolsbee added that price increase readings for January and February were higher than expected with the "main puzzle" still being housing inflation. "So we're in an uncertain state but it doesn't feel to me like we've changed fundamentally the story that we're getting back to target," Goolsbee said. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/feds-goolsbee-says-he-sees-three-rate-cuts-this-year-2024-03-25/

2024-03-25 14:48

WASHINGTON, March 25 (Reuters) - The U.S. Federal Reserve looks on track to cut interest rates as the presidential campaign season heats up, potentially delivering President Joe Biden a boost as polls show Americans dislike his handling of the economy. The Fed could play an outsized - and potentially uncomfortable - election-year role by helping shape attitudes about stubbornly high inflation and mounting housing costs that have been a drag on Biden's reelection efforts. Rate cuts will also invite critics - Republican challenger Donald Trump chief among them - to argue an agency set up to be an independent monetary authority is tipping the political scales toward Biden. Indeed, Trump isn't even waiting for the first rate cut to happen before making that claim, telling Fox Business last month he expects Fed Chair Jerome Powell - whom Trump installed as central bank chief in 2018 and soured on soon afterward - "to do something to probably help the Democrats ... if he lowers interest rates." Trump's angst - and Biden's likely optimism - over the matter is understandable given the hefty mindshare interest rates have come to claim among consumers fatigued and angered by enduring the steepest inflation since the Reagan administration. "Rate cuts are massively popular with people. It will really help build confidence in the economy just as people are paying closer attention to the election," said Celinda Lake, a top Biden pollster in his 2020 campaign who has recently done private polls on the Fed for a client. "People are really feeling like they are being gouged every way to Sunday." TOO SLOW TO MATTER? Americans in poll after poll rank the economy at or near the top of their most important election-year issues, and the outlook U.S. central bankers sketched at last week's meeting is rather a rosy one for Biden. Officials' projections suggest he will ride a growing economy, low unemployment, moderating inflation, and also cheaper credit into Election Day on Nov. 5. Investors now anticipate rate cuts at two of the four Fed meetings between now and then, in mid-June and again in mid-September, decisions that Biden could then point to as evidence the worst of inflation has passed and that could influence voter perceptions of the economy. Though the Fed only controls an overnight borrowing rate among banks, reductions to that benchmark - set at 5.25%-to-5.50% since last July - translate quickly to lower mortgage rates, cheaper car loans and easier financing terms for small businesses. The question is whether what is anticipated - roughly half a percentage point of reductions before voters go to the polls - will be sufficient to move the needle. Lindsay Owens, head of the Groundwork Collaborative, a progressive Washington think tank, is skeptical that it will. With the unemployment rate low, the economy growing at a strong pace and inflation still a concern, the Fed will cut rates too slowly to aid Biden all that much politically, she said. "We're in a 23-year-high interest rate environment and getting another 25-basis point cut or two before November doesn't change the fact that mortgage rates are going to be high," Owens said. 'THAT LITTLE OUTFIT' Polls repeatedly show Americans give Biden poor ratings for his handling of the U.S. economy, due in large part to rising costs for groceries, gasoline and other necessities that have squeezed the poor and middle class. Biden has spent large parts of the last year touting the strong economy, but the effort has done little to change Americans' negative attitudes. The University of Michigan's widely followed Consumer Sentiment Index plunged to a record low in June 2022 as inflation raged at a four-decade high of 9.1%. Sentiment is now about halfway between that and its pre-pandemic averages. The developing dynamic between Biden, the economy and the Fed is in contrast to what former presidents Jimmy Carter and George H. W. Bush faced in the late 1970s and early 1990s, when inflation and Fed rate hikes arguably hurt their reelection chances. Both lost. For the Fed, the current outlook, if it meets expectations, would be a singular triumph of its own. Aggressive rates hikes during 2022 and 2023 brought a punishing bout of inflation under control without causing a recession, and now a turn to rate cuts may be as close as the central bank comes to a declaration of victory. Biden offered a preview of sorts of how he will incorporate Fed decisions during a campaign stop in Philadelphia earlier this month. He talked about his efforts to lower housing costs for Americans and made a prediction. "I can’t guarantee it, but I’ll bet you — I’ll bet you those rates come down more because I bet you that little outfit that sets interest rates is going to come down," Biden said. The White House later clarified that Biden was offering his view of the economy, not making recommendations to the independent Fed, underscoring the political tightrope Biden and his campaign must walk when talking about the central bank. 'BIDENFLATION' Republicans have used the Fed's rate hikes to bludgeon Biden, seeking to tether them to his mismanagement of the economy. “Under Joe Biden, the Fed hiked interest rates to the highest level in 23 years – making life harder for families already struggling with the impact of Bidenflation," said Republican National Committee spokesperson Anna Kelly. Trump, who has his own tangled history with Powell, will no doubt take note of any rate cuts. He promoted Powell, a Fed governor at the time, to chair, but quickly clashed with him for raising interest rates – accusing him of trying to wreck the economy and at one point all but declaring him an enemy of the people. Trump has made pinning the blame for inflation on Biden a key feature of his campaign rallies, and has not hesitated to paint Powell as a political actor who will take an action that could benefit his Democratic rival. In his Fox Business interview with Maria Bartiromo last month, Trump said he believed Powell was looking to cut rates "for the sake of maybe getting people elected." North Carolina State economics professor Michael Walden has some advice for Powell, who faces hectoring from one camp or the other regardless of what the Fed ultimately does with rates. "Whatever the source of criticism, Chairman Powell should be ready to cover his ears in the coming months," he said. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/federal-reserve-expected-cut-rates-lift-bidens-prospects-2024-03-25/

2024-03-25 13:58

BUENOS AIRES, March 25 (Reuters) - Argentina's markets are in celebration mode ahead of the long Easter public holiday with sovereign bonds and equities on a prolonged rally buoyed by fiscal tightening and pro-investor measures taken by libertarian President Javier Milei. Some dollar bonds have hit record highs since a major debt restructuring in 2020 after Milei took office late last year, pledging to put the country's creaking finances in order, reach a zero deficit and take a "chainsaw" to spending by the state. "The imbalances are reducing. In February, both the fiscal result and the trade balance were positive again, for the second consecutive month. The markets? They are celebrating," said local economist Esteban Domecq. Argentine markets will have a curtailed week with the coming Thursday-Tuesday national holiday. Milei has been feted by the markets for his pro-investor focus and austerity which has helped rebuild reserves and post fiscal and trade surpluses at the start of the year. Economic growth, though, is stalling and poverty is rising. Inflation remains north of 275% and tight capital controls, in place since 2019, remains a weight on business. Javier Casabal of Adcap Grupo Financiero said Milei's tough reforms and fiscal tightening were necessary, though the impact on the economy and people's spending power was a risk. "Will people tolerate things until we see the light at the end of the tunnel? So far, the response is positive," he said. Brokerage Delphos Investment said the government was proving to be pragmatic. Milei has faced push-back to his reforms from lawmakers and regional governors, as well as an increase of protests and strikes around the country. "The fact they keep pushing on with the fiscal adjustment and accumulation of reserves is being celebrated," it said. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/argentine-markets-celebratory-mood-ahead-easter-break-2024-03-25/