Donald Trump took aim at the “faulty thought process” at the Federal Reserve less than a day after the central bank’s New York branch took the unusual step of clarifying one of its policymakers’ speeches that boosted market expectations for aggressive interest rate cuts. In his second Twitter attack on the Federal Reserve this week, the US president took to the social media platform on Friday and said: “Because of the faulty thought process we have going for us at the Federal Reserve, we pay much higher interest rates than…

John Williams, the president of the Federal Reserve Bank of New York, stoked expectations of an aggressive 50 basis-point interest rate cut by the US central bank this month, after touting the benefits of “preventive measures” to protect the economy.  In a speech on Thursday, Mr Williams laid out the case for early monetary easing in a low interest rate environment, likening it to a vaccination for children against illness down the road. “It’s better to deal with the short-term pain of a shot than to take the risk that…

Honeywell on Thursday reported better than expected second-quarter profits driven by strength in its aerospace business and delivered a slightly rosier full-year outlook, despite what its chief executive called an “uncertain” global economy.  The New Jersey-based industrial giant said organic sales — which strip out the impact of foreign exchange and the spin off of its home and transportation systems businesses — rose 5 per cent, shy of analysts’ expectations for a 6.3 per cent increase, according to a Refinitiv survey of analysts. “We are continuing to plan cautiously for…

What the heck is happening to global trade? This is a question G7 finance ministers and central bankers might have asked as they met in Chantilly in France this week. At the start of the previous decade, global trade was growing at almost 8 per cent a year, twice the pace of growth in gross domestic product. This year, however, the World Trade Organization expects trade to rise by a mere 2.6 per cent — the same as projected global GDP growth. Unsurprisingly, this turnround has sparked hand-wringing about the…

G7 countries have agreed a compromise on how to change the international tax regime to ensure fair taxation of big multinationals, including tech giants such as Google and Facebook, according to the French hosts of a G7 meeting of finance ministers and central bankers. “Ministers agreed that it is urgent to address the tax challenges raised by the digitalisation of the economy and the shortcomings of the current transfer pricing system,” said a French summary of the meeting’s conclusions. Steven Mnuchin, US Treasury secretary, said: “We’ve made some significant progress…

US growth and bond yields have converged towards those of the rest of the world this year. But there has been no reversal of the US dollar’s 2018 strength, merely a slowing of its appreciation. Neither a dovish Fed nor a currency-focused White House has been able to change its trajectory. That is because the dollar’s fortunes are not being scripted in the US but in the rest of the world. For decades, the most consistent driver of the dollar has been the difference in growth between the US and…

The FT’s global China editor James Kynge says a slowdown in construction and industrial output is far more significant to China’s GDP growth than US President Donald Trump’s tariffs on exports July 16, 2019 Filmed by Tom Griggs, additional footage by Reuters Source link

Second-quarter profits at SAP missed expectations after Europe’s largest software maker — and Germany’s most valuable company — was hit by the simmering trade war between China and the US, which has dented software sales in Asia.  Excluding acquisition and restructurings costs as well as stock-based compensation, the Walldorf-based maker of enterprise software increased operating profit by 11 per cent year on year to €1.82bn, SAP reported on Thursday. Analysts polled by Vara Research had on average expected a 14 per cent increase. Chief financial officer Luka Mucic confirmed the…

Japanese exports continued to slump in June against a backdrop of slowing global growth and persistent trade tensions, while a larger than forecast fall in imports took the country’s trade balance back into surplus. Data released by the Finance Ministry on Thursday showed that exports from Asia’s second-biggest economy fell by 6.7 per cent in June compared to a year ago, marking the seventh month of contraction in a row.  A poll of economists by Reuters had forecast a slightly smaller drop of 5.6 per cent.  The data came as…

Signs of a decelerating US economy are showing up on the nation’s railways, as the carriers of bulk goods from coal to steel report falling freight volumes. An index of the biggest US railway stocks fell more than 7 per cent on Wednesday after a gloomy business prognosis from CSX, whose 21,000-mile network runs east of the Mississippi river. The company predicted a 1-2 per cent decline in revenue this year, abandoning a previous forecast for growth, as its boss outlined a “slow, lazy, malaise-type drift down”. “The present economic…