Fed holds rates steady despite ongoing pressure from Trump
Federal Reserve
has defied
Donald Trump
's calls to slash borrowing costs, keeping US interest rates on hold for the fifth meeting in a row.
The central bank said on Wednesday that it opted to keep rates at 4.25-4.5 per cent, citing a 'solid' labour market and 'somewhat elevated' inflation.
Two members of the rate-setting Federal Open Market Committee (FOMC) dissented, with governors Christopher Waller and Michelle Bowman backing a quarter-point cut. It marked the first time since 1993 that two governors dissented on a rate decision.
The FOMC also warned growth had 'moderated' over the first half of the year, suggesting officials are edging towards backing cuts at future meetings.
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The schism on the FOMC comes amid rising tensions between the White House and rate-setters. The president has repeatedly attempted to strong-arm the Fed and its chairman,
Jerome Powell
, into cutting rates, claiming the strength of the world's largest economy warrants them being at 1 per cent.
Mr Trump also made a highly unusual visit to the Fed's headquarters last week, where he insisted rates should be lower and scolded Mr Powell for cost overruns related to a $2.5 billion renovation.
Bureau of Economic Analysis data published on Wednesday morning showed the US economy expanded by an annualised rate of 3 per cent in the second quarter, after shrinking during the first three months of the year.
But economists said there were signs the economy lost momentum in the first half of 2025, with consumers slowing their spending as they have grown concerned about tariffs and the strength of the labour market. There are also signs that high interest rates are weighing on the country's housing market.
Joe Lavorgna, economic counsellor to US treasury secretary Scott Bessent, argued at an event in Washington on Wednesday that 'if you look at the interest sensitive parts of the economy, they're on the softer side'. He added that the central bank's main interest rate had been above the so-called neutral level, where growth is neither boosted nor constrained, for more than three years. - Copyright The Financial Times Limited 2025
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Irish Times
2 hours ago
- Irish Times
Asian shares set for worst week since April after US tariff blitz
Asian shares were headed for the worst week since April on Friday after the US slapped dozens of trading partners with steep tariffs, while investors anxiously await US jobs data that could make or break the case for a Fed rate cut next month. European stock markets are on track for a lower open, with Euro Stoxx 50 futures down 0.5 per cent. Both Nasdaq futures and S&P 500 futures slipped 0.2 per cent after earnings from Amazon failed to meet lofty expectations, sending its shares tumbling 6.6 per cent after hours. Late on Thursday, President Donald Trump signed an executive order imposing tariffs ranging from 10 per cent to 41 per cent on US imports from foreign countries. Rates were set at 25 per cent for India's US-bound exports, 20 per cent for Taiwan's, 19 per cent for Thailand's and 15 per cent for South Korea's. He also increased duties on Canadian goods to 35 per cent from 25 per cent for all products not covered by the US-Mexico-Canada trade agreement, but gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal. 'The latest tariff announcement offers some surface-level clarity, but beneath it lies a fog of uncertainty,' said Thomas Rupf, Chief Investment Officer, Asia of VP Bank. 'Despite some countries securing better terms, the overall impact is negative. We're entering an era of higher barriers to trade, which will have an impact and hurt growth.' MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent to bring the total loss this week to 2.2 per cent, the biggest since April. South Korea's KOSPI plunged 3.5 per cent while Taiwanese shares fell 0.5 per cent. Japan's Nikkei dropped 0.6 per cent. Chinese blue chips fell 0.7 per cent and Hong Kong's Hang Seng index lost 0.8 per cent. Overnight, Wall Street failed to hold onto an earlier rally. Data showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify, while weekly jobless claims signalled the labour market remained on a stable footing. Fed funds futures imply just a 39 per cent chance of a rate cut in September, compared with 65 per cent before the Federal Reserve held rates steady on Wednesday, according to the CME's FedWatch. Much now will depend on the US jobs data due later in the day and any upside surprise could price out the chance for a cut next month. Forecasts are centred on a rise of 110,000 in July, while the jobless rate likely ticked up to 4.2 per cent from 4.1 per cent. The greenback found support from fading prospects of imminent US rate cuts, with the dollar index up 2.5 per cent this week against its peers to 100, in the biggest weekly rise since late 2022. The Canadian dollar was little impacted by the tariff news, having already fallen about 1 per cent this week to a 10-week low. The yen was the biggest loser overnight, with the dollar up 0.8 per cent to 150.7 yen, the highest since late March. The Bank of Japan held interest rates steady on Thursday and revised up its near-term inflation expectations but Governor Kazuo Ueda sounded a little dovish in the press conference. Treasuries were largely steady on Friday. Two-year Treasury yields were flat at 3.9510 per cent, while benchmark 10-year yields ticked up 2 basis points to 4.3781 per cent, after slipping 2 bps overnight. In commodity markets, oil prices were little changed after falling 1 per cent overnight. US crude rose 0.1 per cent to $69.36 per barrel, while Brent was at $71.8 per barrel, up 0.1 per cent. – Reuters
RTÉ News
3 hours ago
- RTÉ News
Europe wakes up to Trump's new tariff reality
As US President Donald Trump's new tariff regime clicks into gear, producers around Europe are feeling the impact, some holding back shipments, others hiking sticker prices or taking a hit to margins. Some fear they will not survive at all. The US will impose a 15% tariff on most European exports from today, part of a wider barrage of levies set to redraw global trade. While down from even more elevated threatened rates, the tariffs are the highest since the 1930s. "Companies are waking up to the fact that we're dealing with an historically higher tariff rate," said International Chamber of Commerce Deputy Secretary General Andrew Wilson. "It's difficult to see that moving unless there are catastrophic consequences of the US economy," he said. He added the chamber was seeing shipment delays and companies reassessing supply chain strategies. Trading with the United States was now "hellishly more difficult." "The complexity of doing business with the US has gone to levels nobody could have imagined," he said. 'Tarrifs hurt the Americans, they hurt us' In Germany's Moselle Valley, winemaker Johannes Selbach said tariffs were damaging for the industry on both sides of the Atlantic. They had been hoping for zero-for-zero tariffs, but face 15% for now, with sector specific talks ongoing. "The tariffs hurt the Americans and they hurt us," Selbach said in a warehouse surrounded by crates of wine with "USA" written on them in black letters. "Thousands of families who produce wine in Europe and thousands of families in the importing, wholesaling, retailing, restaurant business in the US are dependent on the flow from both sides," he said, adding jobs and profits would be hit. Different sectors face varying degrees of pain. Higher-end luxury brands have more pricing power to adapt to the tariffs. Big companies can swallow some margin loss or shift some production into the United States, though often not all of it. Even big consumer firms like Procter & Gamble have flagged US price hikes to deal with the tariff impact. Adidas said it could increase prices. Reuters' global tariff tracker shows at least 99 out of nearly 300 companies monitored have announced price hikes in response to the trade war, most from Europe. Mr Trump has said the tariffs are a response to persistent US trade imbalances and declining US manufacturing power, and that the moves will bring jobs and investment to the nation. 'We cannot relocate champagne vines' Diverging US tariffs globally remain a challenge, however, with big manufacturing centers like Mexico, Canada, India and Vietnam having higher rates than others like South Korea or Europe. Smaller players often can't make quick changes to production and supply chains. Hugo Drappier, a champagne maker who runs his own firm Champagne Drappier, pointed out that the bubbly beverage could only be produced in a particular region of France. "It's an industry that employs a lot of workers who can't be relocated, precisely because the work is done here. We don't have the option of relocating champagne vines elsewhere in the world," he said. He said some orders had been held up due to tariff uncertainty, though he retained hopes that trade talks were becoming more positive, with the 15% rate better than previous threats of 30%. Laurent Cohen, CEO of family-owned perfumery Corania, based in a northern suburb of French city Marseille, is scouring for new markets and ways to maintain business in the United States, which accounts for a quarter of sales. That may mean a hit to margins and higher US prices, he said. "I praise the fact that we are no longer in a state of uncertainty," he said, referring to the US trade deal. "But with 15% customs duty on our products - which are affordable perfume products - we will now have to show immense ingenuity to keep on going in the US market."
The Irish Sun
3 hours ago
- The Irish Sun
We dodged a bullet this week & Ursula must have been bricking it, now here's what we need to do for Trump's last 3 years
6 WE dodged a bullet this week. Advertisement Taoiseach 6 Trump and Von Der Leyen met in Scotland to agree a 15 per cent tariff deal Credit: Reuters Sitting opposite him was The Before they headed off to knock their heads together in private, Von Der Leyen said of Trump, 'He's tough, but fair,' while Trump said of himself: 'I'm a tough negotiator and dealmaker.' Advertisement Poor old Ursula. She must've been bricking it. Trump put the chances of a deal at '50-50', adding 'I'm not in a good mood.' Which must've made Ursula doubly petrified. Back in But after little more than an hour, the pair emerged and announced they'd struck a deal. It wouldn't be as good as the 10 per cent deal the Advertisement We'd be hit with across-the-board tariffs of 15 per cent, HALF of what Trump had vowed to impose today had a deal not been achieved. Trump triumphed: 'We have reached a deal. It's a good deal for everybody. "It's going to bring us closer together.' Von der Leyen hailed it too, as a 'huge deal', won after 'tough negotiations'. Micheal and Simon could pinch their jocks free from their a**e cheeks again. Phew. Advertisement The taoiseach said: 'In essence, we have avoided a trade conflict here which would have been ruinous, which would have been very damaging to our economy, and to jobs in particular.' NOT A POT TO PISS IN He was spot on. Had a deal not been thrashed out, Ireland, more than any other EU nation, would have been thoroughly banjaxed. Why? Well, our economy has been ridiculously over-reliant on revenue from US multinationals for decades. Before the IDA began the process of attracting the big US corporate giants to Ireland with the promise of low We hadn't a pot to piss in as a nation. In 1984, just four per cent of Ireland's tax revenue came from foreign multinationals. Advertisement The economy was a basket case. But throughout the 1980s, 1990s and early noughties, Ireland's economy boomed thanks to huge multinational tax revenues. WORRIED SICK By 2024, almost a third of all tax revenue (29 per cent) came from foreign multinationals. Some 75 per cent of them Without the Yanks and their tax dollars, we'd soon be back in the dark days of the 1980s. Advertisement No wonder Micheal and Simon and Think of the many tens of thousands of jobs that would have disappeared overnight. It would have meant economic armageddon. GOOD NEWS FOR IRISH Now, 15 per cent tariffs will hurt Ireland's coffers. But it's not as ruinous as might have been expected. The nitty gritty of this week's US-EU tariff deal still has to be worked out. Advertisement The While, pharma is not explicitly mentioned in the deal, Ursula Von Der Leyen said clearly that the 15 per cent rate WILL apply to the export of drugs to the US. Which is great news for us. It will save many jobs here. And Irish government officials deserve a pat on the back for ensuring a deal on pharma. Without it, we'd have been goosed. PIPE DREAM Remember, as many as 90 pharmaceutical companies operate in Ireland, with around 50,000 people employed by US pharma firms across the country. Advertisement To give you an idea of just how much Ireland relies on pharma taxes, last year they contributed €10 billion to the exchequer — about 10 per cent of all the tax Ireland raked in. We exported €78 billion worth of goods to the US last year. Pharma made up €58 billion of that total. All of which had riled Trump, who has been adamant since assuming power that he wants US pharma companies to manufacture back in the US. It's a pipe dream however, like his entire Make America Great Again fantasy. US multinationals are here not just because of our low corporate tax rates. Advertisement HEEL OF THE HUNT They're here because of our educated workforce, because we work hard and are reliable, because of Ireland's location on the edge of Moving back to the US would be complex, costly and time-consuming. In the heel of the hunt, just not worth it. And anyway, Trump will be gone from office in three years, by which time sanity will hopefully have prevailed in US politics and someone who doesn't want to destroy world trade will be in the Oval office. We can only hope and pray for that day. Advertisement Until then, we just keep the head down, roll with the 15 per cent tariffs, and hope a Trump bullet — and he will fire more, for sure — never hits home. RADICAL PRIEST INFAMOUS Ryan grew up on a farm in 6 Father Patrick Ryan gave money to the IRA and earned the nickname 'The Padre' Credit: Photocall Ireland He entered the Pallatine order aged 14, famously saying later in life that nothing confirmed the social status of a Advertisement He was posted as a young priest, aged 24, to East In 1969 he was posted to a parish in East He managed to get out of it by convincing his superiors that he needed to go home to care for his sick mother. Back home, as a disaffected priest he'd collect for the poor, but some of the donations he siphoned away for the IRA. His superiors noticed and he confessed to 'giving it to another organisation' without naming the Provos. Advertisement He became invaluable to the IRA, earning the moniker 'the Padre'. The British press were less romantic, calling him The Devil's Disciple and The Terror Priest. He would go on to become one of the IRA's biggest fundraisers. He personally helped bring money and guns from Gaddafi's Libya to the IRA in the 1980s. He also honed skills he learned in Africa to build detonators for IRA bombs, one of which was used in the Brighton bombing that almost killed Advertisement His devices were also used in the Hyde Park bombing in July 1982 and in the August 1979 Warrenpoint bombing that killed 18 British soldiers. He told his biographer, Jennifer O'Leary: 'The only regret I have was that I wasn't more effective, that the bombs made with the components I supplied didn't kill more.' Her book The Padre: The True Story of the Irish Priest Who Armed the IRA With Gaddafi's Money was published in 2023. It's a fine read. He was arrested in Belgium in 1988 in connection with the murders of three off-duty British soldiers in the Netherlands. Margaret Thatcher requested his extradition. Ryan responded by going on hunger strike and was repatriated to Ireland. Advertisement Thatcher demanded Charles Haughey, then taoiseach, hand him over, telling him, 'He's a really bad egg.' Haughey refused. He broke off ties with the IRA shortly afterwards, saying he had been compromised by British agents. He died in Dublin on June 15. LEGEND LOST THEY gathered in their many thousands this week to say goodbye to the king of heavy metal, 6 Icon Ozzy Osbourne passed away suddenly on July 22 Credit: Getty Images - Getty Advertisement 6 Thousands turned out for the Black Sabbath singer's funeral Credit: PA Outside Ozzy's boyhood home, which sits in the shadow of Villa Park stadium, fans and wellwishers laid wreaths and ballons plus drawings, posters and paintings to honour the Prince of Darkness. Despite his notoriety and his wealth, Ozzy, left, remained a humble man right up until his death. He preferred to take people down a peg or two and laugh at the world. He was a salt-of-the-earth Brummie, that's why. Farewell buddy. Advertisement SUBHUMANS CAGED I USED to cover the courts. Many moons ago now, but they were an important hunting ground for any reporter wanting to get to grips with reality. Drunks, domestic abusers, Gougers these days are far more violent; to wit, the five subhumans caged for 60 years this week for the barbaric three-hour Back in my day there were no people like that. REGULATION NEEDED THE online ghouls were at it within minutes of a cop being stabbed on Dublin's Capel street on Tuesday evening. Far-right accounts that flourish on Elon Musk's sewerpit, 6 Elon Musk's X platform allows people to spread lies without intervention Credit: Reuters The authorities call it 'misinformation' and 'disinformation'. Instead, they should just brand it all for what it is, plain and simpl. Advertisement LIES. If the same crap that appears on X were printed in a newspaper, it would be rightly sued and forced to pay out a substantial sum in reparations. But X claims it's not a publisher – it bloody well is – merely a platform and has no obligation to fact check anything that is put up. Not only is that argument balderdash (X is a publisher, just like a newspaper or a broadcaster and should be treated as such) it is morally repulsive. But just one look at Advertisement The state is scared to get tough with the tech giants, but if free speech and truth is to mean anything, X and Meta and the rest of them need to be regulated just as newspapers and broadcasters are. CASH GRAB ONLY in Ireland. A few years back the HSE paid a medical supplies company €720,000 TWICE for the same invoice. The right arm not knowing what the left arm is at is a core feature of how the state operates. Has been and will forever be thus. Well, new HSE boss, Bernard Gloster, to his credit, is shaking things up. Keep at it. The HSE is trying to recoup the €750k it overpaid. Good luck with that seeing as the company, PMD Device Solutions is in liquidation. Only in Ireland.
