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Yahoo
3 days ago
- Business
- Yahoo
Economists Warn ECB to Avoid Delaying Over Last Two Rate Cuts
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. NYC Congestion Toll Brings In $216 Million in First Four Months The Economic Benefits of Paying Workers to Move Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania NY Wins Order Against US Funding Freeze in Congestion Fight NY Congestion Pricing Is Likely to Stay Until Year End During Court Case The European Central Bank will lower interest rates twice more, according to a Bloomberg survey, but respondents warned it shouldn't wait too long between those moves or investors will conclude that its easing campaign is already over. Respondents predict quarter-point reductions on June 5 and at September's meeting, when new quarterly forecasts should shed more light on the effects of US President Donald Trump's reordering of global trade. That would bring the deposit rate to 1.75%, where the poll sees it settling through the end of 2026. With inflation near 2%, Belgium's Pierre Wunsch and Greece's Yannis Stournaras — who hail from either end of the hawk-dove spectrum — have each discussed the merits of pausing soon. As well as buying time to digest the jolts from Trump's tariffs, a timeout would signal ECB loosening is approaching an end, without formally committing. 'Further easing is still on the cards this year but most likely not before autumn,' said Nerijus Maciulis, chief economist at Swedbank. After June's cut, 'the Governing Council will have a full three months to assess the impact of changes in US trade policy.' Sitting out one or more meetings before continuing to trim borrowing costs would risk communication challenges for President Christine Lagarde that grow with time, the poll showed. Almost 30% of analysts say the ECB can hold just once before markets conclude rates are at a floor. A quarter reckon it can afford a pause stretching for two meetings. The ECB is wary of confusing investors. An account of its last policy meeting revealed that officials saw the need 'to be a beacon of stability' and not cause 'more surprises in an already volatile environment, which might amplify market turbulence.' Asked at which point the ECB would acknowledge that it's finished lowering rates, most survey respondents said it won't. 'The ECB wants to keep all options open,' said Ulrike Kastens, a senior economist at DWS International. 'Although the disinflationary trend is well on track in the short term, the ECB is likely to reiterate that the medium-term outlook for inflation is uncertain.' A stronger euro, cheaper oil and softer economic growth — consequences of the trade uncertainty — suggest inflation will reach the ECB's target sooner than previously thought. But risks including supply-chain disruptions and retaliatory tariffs by the European Union could revive price pressures down the line. Euro-area consumers are showing signs of concern. Their expectations for inflation over the next 12 months ticked higher in both March and April. Analysts predict the ECB's new outlook next week will largely confirm the one presented in March, with weaker inflation this year and slower growth in 2026. But they also warn the forecasts won't fully account for the trade mess the euro zone could find itself in. 'The biggest challenge will be how to deal with ongoing tariff uncertainty,' ING's Carsten Brzeski said. 'The ECB needs to wait until the end of the 90-day pause before it can incorporate tariffs into its projections. This means that, for now, only the disinflationary impact from a stronger euro and lower oil prices will dominate the rate decision.' The alternative outcomes that the ECB will publish alongside its baseline may help determine the best course of action. But the fact that such scenarios are being prepared at all — having not been used since the pandemic and Russia's attack on Ukraine — underscore the ever-changing backdrop with which policymakers are grappling. 'After several months in which ECB policy has been very predictable, the summer could present bigger challenges,' said Fabio Balboni, a senior euro-zone economist at HSBC. 'An increasing divergence seems to emerge within the Council on what's next.' In addition to rates, some officials want to discuss the implications of quantitative tightening as maturing bonds roll off the ECB's balance sheet. Executive Board member Piero Cipollone has said rate cuts, which ease financing conditions, should 'compensate' for QT. Only about a quarter of respondents share his concern and say the ECB should halt the policy — either immediately or once reductions in borrowing costs are over. Traders are betting on at least one more cut this year beyond June, fully pricing it will arrive by October with a 30% chance of further reduction by December. A quarter of economists, however, see next week's rate move as the end of the line. 'The ECB will need to send a message that balances the baseline that the cutting cycle is essentially done, while keeping its options open for any negative shocks that may materialize,' said Bas van Geffen, senior macro strategist at Rabobank. 'That's a tightrope to walk, with the markets pricing further cuts and still biased to look for lower rates.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
Bloomberg
6 days ago
- Business
- Bloomberg
Shipping Bottlenecks in Europe Send a Warning to US, Asia
By Updated on Save Takeaways NEW Supply Lines is a daily newsletter that tracks global trade. Sign up here. Port congestion is worsening at key gateways in northern Europe and other hubs, according to a new report which suggests trade wars could spread maritime disruptions to Asia and the US and push up shipping rates.
Yahoo
7 days ago
- Business
- Yahoo
Shipping Bottlenecks in Europe Send a Warning to US, Asia
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Port congestion is worsening at key gateways in northern Europe and other hubs, according to a new report which suggests trade wars could spread maritime disruptions to Asia and the US and push up shipping rates. Waiting times for berth space jumped 77% in Bremerhaven, Germany, between late March and mid-May, according to the report Friday from Drewry, a maritime consultancy in London. The delays rose 37% in Antwerp and 49% in Hamburg over the same stretch, with Rotterdam and the UK's Felixstowe also showing longer waits. Labor shortages and low water levels on the Rhine River are the main culprits, hindering barge traffic to and from inland locations. Compounding the constraints is US President Donald Trump's temporary rollback on 145% tariffs on Chinese imports, which has pulled forward shipping demand between the world's largest economies. 'Port delays are stretching transit times, disrupting inventory planning and pushing shippers to carry extra stock,' Drewry said. 'Adding to the pressure, the transpacific eastbound trade is showing signs of an early peak season, fueled by a 90-day pause in US–China tariffs, set to expire on Aug. 14.' Similar patterns are emerging in Shenzhen, China, as well as Los Angeles and New York, 'where the number of container ships awaiting berth has been increasing since' late-April, it said. Rolf Habben Jansen, chief executive officer of Hamburg-based Hapag-Lloyd AG, said on a webinar last week that, although he's seen recent signs of improvement at European ports, he expects it will take 'another six to eight weeks before we have that under control.' Still, Torsten Slok, Apollo Management's chief economist, pointed out in a note on Sunday that the US-China tariff truce reached almost two weeks ago hasn't yet unleashed a surge in ships across the Pacific. 'This raises the question: Are 30% tariffs on China still too high? Or are US companies simply waiting to see if tariffs will drop further before ramping up shipments?' Slok wrote. EU-US Dispute US tariffs – combined with sudden threats and truces – make it difficult for importers and exporters to calibrate their orders, causing unseasonal swings in demand. For shipping lines, those translate into delays and higher costs requiring freight rate hikes. The latest blow to visibility came Friday, when Trump threatened to hit the European Union with a 50% tariff on June 1. He reversed course over the weekend, agreeing to extend that deadline to July 9 after a phone call with European Commission President Ursula von der Leyen. With just over six weeks until higher tariffs potentially kick in, transatlantic cargo volumes should get a boost because 'shippers have an even higher incentive to move whatever they can to the US before it hits,' said Emily Stausbøll, a senior shipping analyst at Xeneta, a digital freight platform based in Oslo. The added policy uncertainty 'will be a deadweight cost to global activity by adding risks to decisions on expenditures,' Oxford Economics said in a research note on Saturday. Germany, Ireland, Italy, Belgium and the Netherlands are the most vulnerable given their ratios of US exports to GDP, it said. Bloomberg Economics said in a research note Friday that 'additional tariffs of 50% would likely reduce EU exports to the US for all products facing reciprocal duties to near zero — cutting total EU exports to the US by more than half.' GLOBAL REACT: What Trump's 50% Duty Threat Means for 'Nasty' EU Mounting uncertainty about whether Trump would follow through on such a big trade threat or postpone it like he did with China is adding to shipping pressures. Carriers including MSC Mediterranean Shipping Co., the world's largest container line, had already announced general rate increases and peak season surcharges, starting in June, for cargo from Asia. In the weeks ahead, those are likely to boost spot rates for seaborne freight, the cost of which is still underpinned by geopolitical turmoil. Cargo ships are still largely avoiding the Red Sea, where Yemen-based Houthis started attacking vessels in late 2023, and sailing around southern Africa to ferry goods on routes that connect Asia, Europe and the US. Avoiding 'Massive Congestion' On the webinar, Habben Jansen said it's still not safe to traverse the Red Sea and indicated that any eventual restoration of regular journeys through the Suez Canal would have to be gradual, perhaps taking several months, to avoid flooding ports with vessel traffic. 'If we would from one day to another shift those ships back through Suez, we would create massive congestion in many of the ports,' Habben Jansen said. 'So our approach would be that if we can do it, that we do it over a longer period of time so that the ports do not collapse, because that's in nobody's interest.' --With assistance from Richard Bravo. (Adds comments on transatlantic cargo in 11th paragraph) Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P. 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Yahoo
21-05-2025
- Business
- Yahoo
US-China Tensions Over Chips Risk Hurting Trade Truce, Dialogue
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike US-China tech tensions are flaring again, with Beijing threatening legal action against anyone enforcing Washington's restrictions on Huawei Technologies Co.'s chips, casting a shadow over a recent trade truce and efforts to sustain dialogue. China's Commerce Ministry said in a Wednesday statement that entities could breach the Anti-Foreign Sanctions Law by assisting in the US curbs, without specifying the punishment. The move escalates the tech dispute even as Chinese officials express their wish to improve relations. The US Commerce Department had warned that using the Huawei semiconductors 'anywhere in the world' would violate US export controls before later removing the place reference. China has said the Trump administration's actions on chips undermined recent trade talks in Geneva. Wu Xinbo, director at Fudan University's Center for American Studies in Shanghai, said the amendment suggests continued contact between the two sides, at least at the working level. 'The challenge is how both sides can keep the momentum gained from the Geneva talks,' he said. 'I hope there can be high-level talks next month. But nothing's guaranteed at the moment.' On the same day of the Chinese warning, Vice Foreign Minister Ma Zhaoxu told new US ambassador to China, David Perdue, that Beijing hopes the US will work together to promote ties. This followed a meeting the day before between People's Bank of China Governor Pan Gongsheng and former US Treasury Secretary Timothy Geithner, now chairman of Warburg Pincus, according to a brief statement from the central bank. In a separate sitdown between Chinese Foreign Minister Wang Yi and Asia Society CEO Kyung-wha Kang on Tuesday, China's top diplomat said China and the US should work toward finding the right way to get along by fostering positive engagement in the Asia-Pacific region first. The flurry of exchanges comes after high-level talks in Switzerland earlier this month, where both nations agreed to a 90-day pause in some reciprocal tariffs, although substantial levies remain on Chinese imports. These interactions appear to be part of Beijing's effort to maintain dialogue while conflicts concerning US curbs on semiconductors and China's control over critical minerals show little sign of resolution. China's alleged role in fentanyl's flow into the US also remains a significant point of contention, with American officials pressing China for greater cooperation. The simultaneous trade thaw and persistent dispute over access to technology underscore the challenge of resolving the economic conflict between the world's two largest economies. 'My instinct is that tariffs are on a somewhat independent track from weaponizing supply chains. The logic is different,' said Graham Webster, who leads the DigiChina project at the Stanford University Cyber Policy Center. Webster suggested that if the countries reach a more comprehensive trade deal, 'the tech restrictions on one or both sides will be on the table.' Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Inside the First Stargate AI Data Center Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
20-05-2025
- Business
- Bloomberg
China Accuses US of Undermining Trade Talks With Warnings Against Huawei Chips
By and Debby Wu Updated on Save Takeaways NEW Supply Lines is a daily newsletter that tracks global trade. . The Chinese government accused the Trump administration of undermining recent trade talks in Geneva after it warned that using Huawei Technologies Co.'s artificial-intelligence chips 'anywhere in the world' would violate US export controls.
