Latest news with #budgetDeficit
Yahoo
24-05-2025
- Business
- Yahoo
Charting the Global Economy: Long-Term Bond Yields Soar Around the World
(Bloomberg) -- Around the world, yields on longer-dated sovereign debt have soared as investors question the ability of governments to cover massive budget deficits. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? NYC's War on Trash Gets a Glam Squad Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt In the US, 30-year bond yields this week approached levels last seen in 2007 as President Donald Trump's tax bill is poised to swell the budget deficit. Those in Japan exceeded the highest on record in data since 1999, with auctions in both countries drawing tepid demand. Long-dated bonds in the UK, Germany and Australia also faced selling pressure. Meanwhile, banks in China lowered their benchmark lending rates for the first time in seven months and Australia's central bank cut its key interest rate for a second time this year in a bid to mitigate the impact of US tariffs. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: World Investors are warning that governments can't keep borrowing at the pace they did when interest rates were close to zero, particularly since trade tensions and sticky inflation have diminished the probability that policymakers will dramatically ease monetary policy. Meanwhile, a pullback by central banks and pension funds from bond markets has marginalized a once-dependable source of funding. The giants of corporate America from Pfizer Inc. to Alphabet Inc. are borrowing in euros like never before as the anxiety triggered by Trump's tariff threats pushes them to hunt for alternative funding avenues in case their home market freezes up. In addition to the decisions by Australia and Chinese banks, Iceland, Jamaica, Sri Lanka, Egypt and Indonesia lowered rates. Officials in Angola, Nigeria, Zambia, Ghana and Paraguay kept borrowing costs unchanged. The detection of bird flu in a single poultry farm in southern Brazil is reverberating around the world, cutting supplies to voracious consumers from China to Europe. Shipments to top destinations, which also include Mexico and South Korea, have been suspended as the world's largest chicken exporter seeks to stop the deadly H5N1 strain from spreading. Asia A dominant force in batteries and EV manufacturing, China is also the undisputed leader in critical minerals refining, a position it's used to retaliate against Trump's tariffs. Strategic concerns have preoccupied Beijing for decades, well before the US and other Western nations began fretting about access to key metals and the fragility of industrial supply chains. On a corporate campus in northwest Taiwan, a rushed effort to bolster the island's defenses against China is taking shape — with little help from the technology giants who turned this outpost into a global chipmaking hub. The military officials entering and exiting a factory run by Coretronic Intelligent Robotics Corp. — located just miles from the beaches where Beijing's forces would land in an invasion — underscore the firm's role at the heart of Taiwan's homegrown efforts to arm itself with aerial drones. China imported the most gold in nearly a year last month despite record prices, after heightened demand for the precious metal prompted the central bank to ease restrictions on bullion inflows. The rise in imports is likely due to the People's Bank of China allocating fresh quotas to some commercial banks in April, as the authority responds to strong demand from institutional and retail investors at the height of the trade war. Europe UK inflation jumped more than forecast to its highest rate in over a year as households were hit by a raft of price increases, prompting investors to pare bets on rate cuts from the Bank of England. Services inflation, watched closely by the BOE for signs of underlying price pressures, accelerated to 5.4% from 4.7%. Private-sector activity in the euro area unexpectedly shrank in May as services recorded their worst performance in 16 months. Bulgaria is close to clearing a major hurdle toward euro adoption, putting the Black Sea nation on course to join the currency area next year. US Chinese shipments of Apple Inc.'s iPhone and other mobile devices to the US dived to their lowest levels since 2011 in April, underscoring how the threat of US tariffs choked off the flow of big-ticket goods between the world's two largest economies. US businesses are under mounting pressure to import goods while Trump's higher tariffs are on pause, and they're simultaneously navigating increasingly complex filing rules when their cargo crosses the border. Emerging Markets Mexico's annual inflation accelerated more than expected early this month in a report that likely won't deter central bankers from cutting interest rates again in June given the economy also posted weak growth. Argentina's economy grew less than expected in March as the country braced for a new program with the International Monetary Fund. South America's second-largest economy has been showing consistent signs of momentum after two quarters of contraction exacerbated by austerity policies in the first half of 2024. --With assistance from Irina Anghel, Maya Averbuch, Clarice Couto, Enda Curran, Viktoria Dendrinou, Annabelle Droulers, Gerson Freitas Jr., Mia Glass, Alice Gledhill, Ocean Hou, Annie Lee, Yian Lee, Miaojung Lin, Ronan Martin, Brendan Murray, Dan Murtaugh, Slav Okov, Swati Pandey, Abhinav Ramnarayan, Tom Rees, Zoe Schneeweiss, Mark Schroers, Vlad Savov, Manuela Tobias, Jorge Valero, Alex Vasquez, Cindy Wang and Yihui Xie. How Coach Handbags Became a Gen Z Status Symbol Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center Microsoft's CEO on How AI Will Remake Every Company, Including His AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P.
Bloomberg
24-05-2025
- Business
- Bloomberg
Charting the Global Economy: Long-Term Bond Yields Soar Around the World
Around the world, yields on longer-dated sovereign debt have soared as investors question the ability of governments to cover massive budget deficits. In the US, 30-year bond yields this week approached levels last seen in 2007 as President Donald Trump's tax bill is poised to swell the budget deficit. Those in Japan exceeded the highest on record in data since 1999, with auctions in both countries drawing tepid demand. Long-dated bonds in the UK, Germany and Australia also faced selling pressure.
Yahoo
22-05-2025
- Business
- Yahoo
Here is why rates are rising
Rising Treasury yields, particularly the 30-year yield (^TYX), have had the markets on edge. What is causing the rise in rates? Sébastien Page, T. Rowe Price's head of global multi-asset and chief investment officer, explains in the video above. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. For more on the latest market moves, let's welcome in now Sebastian Page, T. Rowe Price, head of global multi-asset and chief investment officer, as well as author of the book The Psychology of Leadership. Sebastian, always great to see you here on set. Likewise. Thanks for having me. So, let's start with an issue front and center for investors right now, rising rates. Two questions, Sebastian, why are they rising, and two, how concerned should investors be? Rates can rise on higher growth expectations. I don't think that's going on over the last few days. Rates can rise on higher inflation expectations. I think that's part of it. Rates can rise on investors being worried about the risk of holding long maturity bonds. I think that's what's going on right now, and it's related to the budget deficit. We're running deficits that pre-COVID at 7% of GDP, we would only run in a recession. And now this budget measure is making its way through Congress, that's getting bond investors nervous, Josh. The bond vigilantes. That's what we call them, the bond vigilantes, is they step in when spending gets out of control. And so how to my second question, you're talking to to T. Rowe Price folks, they ask, how worried should I be, Sebastian? You tell them what? I'll give you a nuanced answer. We are underweight treasuries, so we're positioned for rising rates. So you should be concerned about rising rates, and I think inflation is part of it. You have rising commodities on the horizon in my view, you have, you know, wages growing at 4%, you have a housing shortage, and you have tariffs, which are inflationary. So the risk to inflation is to the upside. However, I want to give you the nuance. I don't think this is cataclysmic. I don't think this is going to break risk assets and be a financial disaster because there's still a lot of demand in the long run for US treasuries. At the same time, we have to worry about these levels of deficits. But this is not like the world's falling apart kind of situation. And you saw it, stocks did okay today. Okay. Sign in to access your portfolio
ABC News
13-05-2025
- Business
- ABC News
Live moment: NT debt approaching record $14b by 2029 as CLP delivers first budget
The Northern Territory's net debt will reach more than $12 billion next financial year, with the budget forecasting a further increase to nearly $14 billion by 2029. The Country Liberal Party government's first budget has revealed a deteriorating fiscal position for the territory, which has a population of around 255,000 people. The budget shows the government will have to borrow $265 million to fund its day-to-day operations next financial year, and another $101 million in 2026-27. When infrastructure funding and the financial performance of government corporations are added to the bottom line, the government will run a fiscal balance deficit of $1.3 billion in 2025-26. Overall, the NT's net debt will rise from $10.5 billion this financial year, to more than $12 billion in 2025-26. By 2028-29, the net debt is forecast to hit almost $14 billion. NT Treasurer Bill Yan said the budget "puts crime victims first, prioritises law and order and begins the long task of repairing Labor's mess". Big spends include an additional $305 million for the beleaguered Darwin ship lift project, on top of $515 million already budgeted.
Wall Street Journal
08-05-2025
- Business
- Wall Street Journal
The Financial Mess Facing the Vatican
Just days before his death, Pope Francis wrestled with an enormous problem: the Vatican's dire finances. The world's smallest country is now facing a budget deficit of millions, and a looming crisis in its pension fund. As the Papal conclave meets this week to vote for a new leader, WSJ's Drew Hinshaw pieces through how centuries of financial mismanagement have culminated into a mess that the next pope will inherit . Jessica Mendoza hosts. Full Transcript This transcript was prepared by a transcription service. This version may not be in its final form and may be updated. Jessica Mendoza: It was winter at the Vatican and Pope Francis was desperate. Francis sat in a reception room short of breath, aids shuffled in and out as the Pope worked through what he thought was a bad cold. Drew Hinshaw: And advisors and Vatican officials are coming in and presenting the details of a city-state effectively that is awash in priceless treasures, but is falling deeper into debt. Jessica Mendoza: Our colleague, Drew Hinshaw, spoke with us from Rome. How much did the finances of the Vatican actually kind of weigh on Pope Francis before his death? Drew Hinshaw: Right up until the end. Jessica Mendoza: That day in February, Francis reviewed documents underneath a cherished painting depicting Mary, Undoer of Knots. In it, the Virgin Mary is shown unraveling a long ribbon. Three days later, Francis was hospitalized with double pneumonia. Drew Hinshaw: And on April 21st he died, leaving his successor with this economic puzzle that one Pope after the next has tried to solve. Jessica Mendoza: Today, as the College of Cardinals gathers to elect a new leader, a major question looms over the conclave. What will the next Pope do about the Vatican's financial crisis? Drew Hinshaw: I mean, this is one of the hidden stories of really the modern papacy is how much the Bishop of Rome is the ultimate bookkeeper for the Vatican. Jessica Mendoza: How would you describe the financial mess that this next Pope will inherit? Drew Hinshaw: I would say un-heavenly. Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, May 7th. Coming up on the show, do the Vatican's finances need divine intervention? For all its global influence, the Vatican is tiny. It's the world's smallest country. It sits in the center of Rome, occupying an area about one-tenth the size of Central Park. Drew Hinshaw: The Vatican, it's both like you think of it as the heart of the Catholic church, but maybe it's better to think of it as like the brain. Jessica Mendoza: That's Drew again. Drew Hinshaw: It's 900 residents. It's the home of the Pope and it's where the direction of the church is set, of course, but it's not where the money's made. Jessica Mendoza: The Vatican might call to mind priceless treasures, gold chalices, the Sistine Chapel, vast cathedrals. But if you look at the religious institution through a fiscal lens, it's actually asset-rich and cash-poor. Drew Hinshaw: The money on Sunday when the collection plate goes around, that's not really going to Rome, that's going to your local and national church. It's this odd thing where it's just totally paradoxical, this extremely wealthy city state that's at the center of this, the largest Christian denomination, but it's not where the money is, in the Catholic Church. Jessica Mendoza: Unlike other countries, the Vatican collects no taxes. The micro-state is increasingly relying on revenue from museum ticket sales and tourism, and that money has to pay for a lot of stuff. Drew Hinshaw: It's got to fund a network of embassies all around the world. It's got to fund a small army, the Papal Swiss Guard. It's got to do upkeep on these marvelous buildings that you can stand and take selfies in front of, and it's increasingly dependent on museum ticket sales to do that. This has got to be the only state on earth that depends on ticket sales. Jessica Mendoza: So how bad is the Vatican's financial situation right now? Drew Hinshaw: The pension fund is one source told us he used the words "Five alarm fire." Jessica Mendoza: As for the Vatican's budget deficit... Drew Hinshaw: It's around 80 million euros, give or take, which is triple what it was about 10 years ago. Jessica Mendoza: Wow. Drew Hinshaw: It's looking really dire. Jessica Mendoza: I want to understand how far back this problem goes. Was there a time when money wasn't a problem for the church? Drew Hinshaw: Maybe in the year zero. I'm being a bit... Look, this history really goes back centuries and centuries of course. The irony is, look, when you go to the Vatican and you see all these beautiful buildings, you're seeing buildings from an era when paying the bills wasn't very difficult for the Pope. The Crusades, Sistine Chapel, Saint Peter's Basilica, these were all financed, but they were financed through a sixth century invention called indulgences. Although that practice was considered so corrupt, it helped spark the reformation. Jessica Mendoza: For centuries, these indulgences basically money to reduce punishment in the afterlife, kept cash flowing until the practice ended in the 16th century. The church also made money by taxing the rich Italian farmland it controlled, territory known as the Papal States. Drew Hinshaw: And that was a pretty steady stream of income. Jessica Mendoza: But that business model fell apart in 1870. That's when the armies of Italy wrested Rome from Pope Pius IX. And it wasn't until 1929 under a treaty with Italy that the Vatican became an independent city-state occupying 0.2 square miles in the middle of Rome. Without taxes, the new micro-state needed other sources of revenue, so the Vatican positioned itself as a financial hub creating its own Vatican Bank. That bank started taking big shares in Italian and European companies. It also started getting mixed up in scandals, including allegations of money smuggling and laundering. Drew Hinshaw: Along the way, the Vatican kind of develops this reputation in the 70s and 80s for being like just basically a really shady place to have a bank account. If you've ever seen Godfather III, this is basically that era. Speaker 3: Oh, if only prayer could pay off our $700 million deficit. Speaker 4: 769. Drew Hinshaw: There was a kind of mafia-linked financier who before his downfall, he'd been close to Pope Paul VI, and he had ties to New York's Gambino crime family. Speaker 5: Michele Sindona, the Italian financier, convicted of a multimillion dollar fraud that led to the biggest bank failure in our country's history. Drew Hinshaw: There was also a huge scandal in the 1980s when the Vatican Bank got caught up in the collapse of an Italian bank, Banco Ambrosiano, and the bank chairman was found hanging under Blackfriars Bridge in London. Speaker 6: The man known as "God's banker" was found hanging from a bridge, his pockets full of cash and bricks. Jessica Mendoza: By the early 2000s, the Vatican's money problems had become pretty dire. Benedict XVI, who became Pope in 2005, set up a unit to combat money laundering, and the Vatican Bank started releasing annual reports for the first time. But the financial knots proved to be too much. Drew Hinshaw: And every source we've talked to has said that this was a factor in Benedict deciding he would become the first pope to resign since 1415. Jessica Mendoza: I remember when Benedict stepped down and I remember what a huge deal it was. I had no idea it had to do with money problems. Drew Hinshaw: Right. Right. By all accounts, the headache of trying to clean this up just became a lot for him. Jessica Mendoza: Into this mess stepped Pope Francis. Speaker 7: The fight against poverty and hunger must be fought constantly. Jessica Mendoza: Francis's election in 2013 seemed to represent a new era of reform. He was known for his frugality having lived through many financial crises in his home country of Argentina. As Pope, Francis attempted to modernize the Vatican's bookkeeping, nuns were still keeping ledgers with pencil and paper. Under his stewardship, the Vatican Bank closed thousands of suspect accounts. He slashed cardinal salaries and perhaps, the biggest move of all... Drew Hinshaw: He hires an executive from the accountant firm, Deloitte, and basically says, brings him into his office and he says, "I want you to be independent. You have my go ahead to-." Jessica Mendoza: Blessing. Yeah. Drew Hinshaw: Yeah. "You have my blessing." I wasn't going to use the word, but, "You have my blessing to probe our accounts, to conduct audits." This was the first time the Vatican had an outside auditor in its modern history. Jessica Mendoza: How did members of the clergy in the Vatican respond to these efforts? Drew Hinshaw: Not well, I think is one way you could say it. And look, their reasoning is this money is vital. We needed to host a commission of theologians, we needed to buy office supplies, coffee. We need this to run our outfit. And if we have to go through the ropes of getting it from the Vatican Treasury, which is this whole other thing that the auditor is looking into, it's going to be really hard and time-consuming. Jessica Mendoza: According to The Journal's reporting, one cardinal took cash out of a Vatican Bank account with plans to hide the money from a team set up to track budgets. Drew Hinshaw: The Cardinal's advisor was telling him, "We must save our money." And they took money out of the Vatican Bank and started storing the cash in a bag, literally a bag. Jessica Mendoza: Wow. The auditor that Francis empowered to clean up the mess soon had a target on his back. Drew Hinshaw: It gets really crazy. I mean, the auditor comes back to his office at one point and the office has been broken into. It's Monday morning, and the bottom of his laptop is unscrewed. There's a spring missing. Jessica Mendoza: Wow. Drew Hinshaw: And he's spooked. He goes and asks Francis like, "What am I supposed to do?" And Pope Francis doesn't really push for an investigation. He just says, "Let's put security cameras outside the office." Jessica Mendoza: The auditor says he hired external consultants to investigate the tampering of his computer and to sweep for bugs in his office. But in June of 2017, Vatican police detained the auditor on suspicion that he hired private investigators to spy on Vatican staffers. The auditor was pressured to resign. He denies the spying allegation. Drew Hinshaw: And that's basically where that auditing effort hits a wall. Jessica Mendoza: Now, the financial woes that plagued Francis will fall to his successor. Speaker 8: And now the doors close. You can hear the applause breaking up behind us here in Saint Peter's Square. Jessica Mendoza: But should the next Pope continue his reforms? The clergy is already taking sides. That's next. The curia, the church's governing body, is famously secretive, so as the conclave gets underway this week, Drew and his reporting partners, Joe Parkinson and Stacy Meichtry have been holding hushed meetings across Rome. Drew Hinshaw: I've reported on authoritarian countries, and I've rarely encountered the kind of just evident nervousness in talking to the press that you encounter here in the center of Rome when you're trying to answer questions about the budget deficit of the Vatican. Jessica Mendoza: Drew and the team met with officials from the Vatican's bank, pension fund and regulatory institutions, and with Cardinals attending the conclave. Drew Hinshaw: We had one guy sit down with me near midnight in the piazza, and one of his first questions for me was, "You're not recording me, are you? Because if you're recording me, this interview's over." And of course we weren't, but it's all fairly cloak and dagger here. Jessica Mendoza: But you did manage to get people to talk to you? Drew Hinshaw: Yeah. Jessica Mendoza: What did you hear? Drew Hinshaw: People are quite alarmed. Jessica Mendoza: Ahead of the start of the conclave, Cardinals held multiple sessions to discuss the financial crisis. One big issue is the pension fund for aging clergy members. The fund is facing about 2 billion euros in liabilities. But the culture of financial mismanagement is also a wedge issue. Drew Hinshaw: There's kind of two camps. There's one that can see it in the kind of dollars and cents terms that we're discussing it, but there's others who say, "Look, we're here to talk about matters of God, of spirituality. Why are we talking about these earthly concerns that are secondary to our mission of saving souls?" And the church has been around for 2000 years. There's a feeling of this is... If, look, if you are running a country, just a kind of totally secular small municipality of 900 people, and you had these kinds of budget deficits, you'd be freaking out. But when underneath that municipality is 2000 years of history, I think you think, "Well, we've survived before." Jessica Mendoza: What happens if the next Pope either does nothing or isn't able to solve this problem? Is this existential for the Catholic church? Drew Hinshaw: The way this was put to me is that they can't just keep kicking the can down the road. They're going to have to do things that are undoubtedly going to be painful for clergy who are expecting to be able to retire and who have obviously fixed salaries and who have one profession. Everybody we've talked to sees only painful choices ahead. Jessica Mendoza: It might mean more salary cuts, reducing core missions, hiking museum fees, overhauling the Vatican Bank. But there's one seemingly obvious solution to this whole money problem. So Drew, can you explain to me how can the Vatican be in such a financial mess if it's also sitting on this pretty unimaginable wealth of art and history, right? They've got the manuscripts in the Vatican Library. They've got works of art from da Vinci and Michelangelo. Couldn't they just sell that stuff? Drew Hinshaw: The Vatican has no intention of ever selling off its inheritance. In fact, it lists many of its kind of priceless works of art, including the Sistine Chapel on its books as at a nominal value of one Euro each, which is a way of saying these things are of religious and artistic and historical significance, not of financial significance. It would never, ever part with its... This is its patrimony. Jessica Mendoza: For the people most concerned about the Vatican's books, their hope is that the conclave will elect someone who can tether heaven to the ground, a pope who is part saint and part CEO. Drew Hinshaw: There's this incredible paradox at the center of this. You have a country that has immense wealth, but it's unable to sustain its basic functions without running a deficit. It's got all these people who work in finance who are basically in the Vatican running its bank and everything else. But at the end of the day, the decisions are taken by clergy who quite honestly could talk to you more about gospel or Acts or the New Testament, the Old Testament than the nuts and bolts of an audit. It's where two realms kind of meet, isn't it? Jessica Mendoza: Yeah. Literally, the earthly and the heavenly. Drew Hinshaw: Yeah. Jessica Mendoza: I guess, the spiritual. Drew Hinshaw: Yeah, exactly. Jessica Mendoza: Yeah. Drew Hinshaw: Yeah. On the one hand, Cardinals are electing someone who is very pointedly in charge of the biggest issues in life, theology and spirituality, and life after life, and doing good in the world, and all of the things that are core to the Christian Gospel. But they've got this kind of dollars and cents problem that they also have to solve, and the idea that one person is going to be good at both of those issues, it's I don't know, seems like a lot to ask of one human being. Jessica Mendoza: That's all for today, Wednesday, May 7th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode from Joe Parkinson and Stacy Meichtry. Thanks for listening. See you tomorrow.
