Latest news with #macroeconomics
Wall Street Journal
12 hours ago
- Business
- Wall Street Journal
G-III Apparel Pulls Certain FY Outlooks on Tariffs
G-III Apparel GIII -2.57%decrease; red down pointing triangle backed its full-year sales outlook, but the company pulled all other guidance for the year due to uncertainty around tariffs and macroeconomic conditions. The company behind fashion brands DKNY, Calvin Klein and Tommy Hilfiger said Friday that current tariffs are expected to result in costs of about $135.0 million this year, largely concentrated in the latter half.
South China Morning Post
4 days ago
- Business
- South China Morning Post
Why China needs bold fiscal expansion to hit 5% growth target
In the years following the 2008 global financial crisis, bold stimulus measures enabled China to achieve a V-shaped recovery. Since then, however, the government has largely maintained neutral – even tight – macroeconomic policies. If China is to achieve its growth target for 2025 , this must change. In fact, since September 2024, China has reoriented its macroeconomic stance substantially. Advertisement Two indicators typically dictate whether a government pursues expansionary or contractionary macroeconomic policies: the rate of economic growth (or the employment rate), and the inflation rate. Low growth calls for expansion (as long as inflation also remains low ), and high inflation requires contraction (calibrated not to crush growth). By this standard, the case for expansionary policies in China today is clear. China's PPI inflation has been in negative territory for the better part of the past 13 years, and its annual average CPI inflation has also been very low, at just 0.2 per cent in 2024. At the same time, China's GDP growth rate has declined from 10.6 per cent in 2010 to 5 per cent last year. So why didn't Beijing embrace macroeconomic expansion much earlier? First and foremost, it fears the deterioration of its fiscal position. At the end of 2023, China's government debt-to-GDP ratio was approaching 61 per cent, and its 'augmented government debt-to-GDP ratio' (which includes debt held by local government financing vehicles ) had reached nearly 117 per cent. While these levels are much lower than those in most developed economies, they are high by Chinese standards, leaving the government reluctant to raise its budget deficit-to-GDP ratio above 3 per cent. Advertisement
New York Times
4 days ago
- Business
- New York Times
The Vertiginous Novelty of America's Debt Pile
At the start of the year, we didn't know how Trump policy would shape up. We still don't. Nor did we know how markets would react. And we still don't. First markets rallied, then after tariffs were imposed and Liberation Day, everything sold. Then, as President Trump pulled back on tariffs, equities rebounded. The concern now is shifting to the biggest market of all, the $29 trillion market for U.S. Treasuries. The Treasury market is where macroeconomics and politics meet, in their purest form, and when it begins to wobble, it is a real cause for concern. Unlike stocks, the Treasury market deals in one asset — U.S. government debt — of various vintages. In the model that most market players have in their heads, on the side of macroeconomics, there is inflation, where a high rate makes bonds less valuable. On the side of politics, there is Congress's ability (or lack thereof) to balance the budget. In between macroeconomics and politics stands the Fed with its power to set interest rates and, in extremis, to buy Treasuries en masse. Given the Fed's ultimate power, it makes little sense to worry about default on U.S. debt. Assuming there isn't willful interference from the White House or Congress, the bills will always be paid. But if the Fed is printing money to do so, the value of the currency you get paid in, and hence the value of the outstanding pile of $29 trillion in debt, could change drastically. And that is why we are beginning to see jitters in the Treasury market. The downgrade of U.S. Treasuries from a perfect AAA score by the ratings firm Moody's doesn't help matters. But it reflects market anxiety rather than being a cause of it. Inflation isn't the big worry right now, either. At below 3 percent, inflation is under control. The real issue is politics. The market is waking up to the scale of Republican deficits — rising up to 7 percent of gross domestic product from under 6 percent; the party's complete refusal to consider serious measures to raise revenue; the state of denial, reminiscent of Saddam-era Baghdad, that pervades Trump administration communications around the issue; and what appears to be a concerted effort to dissuade investment of foreign money in America by depreciating the dollar. There is even talk of a tax on foreign capital inflows. Want all of The Times? Subscribe.
Hospitality Net
4 days ago
- Business
- Hospitality Net
Hotel Market & Feasibility Studies: Connecting Vision with Viability in Untapped Markets
Since the COVID-19 pandemic, macroeconomic trends have helped breathe new life into secondary and tertiary hotel markets. The shift to hybrid and remote work, an increase in highway tourism, and a strengthening of the logistics and manufacturing sectors have supported a resurgence of leisure and commercial hotel demand in many small and medium-sized communities. These factors, among others, have generated interest in new hotel development in these areas, often by local municipalities and/or economic development organizations. However, these smaller markets often fly under the radar of well-established hotel development groups, many of which are facing significant headwinds from rising construction and capital costs in today's market. A hotel market or feasibility study can be a key tool in bridging the gap between these communities and developers, but the usefulness of such a study is highly dependent on the consultant's ability to understand the perspectives and motivations of both public and private interests. Balancing Local Lodging Needs with Hotel Development ROI In my numerous conversations with municipal stakeholders, I've found they often speak of a 'need' for hotel rooms, asking me to evaluate and quantify that need. This perception of 'need' is typically based on anecdotal observations of a lack of quality hotel rooms during periods of peak demand, such as special events or summer weekends. However, community residents and stakeholders do not often consider lodging demand during off-peak travel periods, such as a Tuesday night in January. On the other hand, one of the fundamental concerns of a private developer is the depth and diversity of hotel demand in a given market and its potential to support a profitable operation throughout the year. As a result, the concept of 'need' can be somewhat of a distraction, as it does not necessarily correlate to the viability of hotel development. Orienting the discussion and evaluation of a potential hotel development around its possible benefits, both to the local community and a potential developer, is the first step in bridging the gap between public and private stakeholders. The potential benefit to a private developer is the expected return on investment (ROI), a relatively straightforward metric to evaluate. As profit-oriented private business enterprises, hotel development firms actively seek out projects that will produce an adequate return for the work and risk required to undertake the development. In other words, a developer needs to know if the expected profitability of the hotel operation will justify the cost of construction, including the cost of debt and equity capital. From a municipal perspective, the benefits of a hotel may be less direct and tangible. Hotels generate a variety of direct taxes for a community, including property, sales, and occupancy taxes. They also accommodate visitors to the area who spend money at other local businesses. Additionally, hotels can serve as an amenity to residents and area businesses, allowing them to conveniently host visitors near their homes or offices. The Role of Incentives Numerous hotel development groups throughout the country are actively searching for their next projects. There is a high likelihood that these private developers are already involved in most communities with strong enough lodging demand to produce adequate returns on new hotel development. There are also many other communities that could support profitable hotel operations but not a strong enough ROI level to entice private development. In these locations, many municipalities attract hotel development by offering development incentives to offset project costs and/or improve operational profitability. The same factors come into play in markets where private development is targeting a different hotel class or product type than what would most benefit the community. These incentives frequently include the following: — Source: HVS The potential impact of incentives can be evaluated by comparing the stabilized profitability and cost of a proposed project under both a private development scenario and an incentivized scenario. This is illustrated in the following table, which shows two proformas for a hypothetical select-service hotel development under these different scenarios. — Source: HVS Without incentives, the project would produce a capitalization rate below 7.0%, which would not meet investor return expectations in most markets. However, an abatement of property taxes on the improvements and a partial rebate of sales and/or transient occupancy taxes would increase the cap rate above 8.0%, resulting in an attractive investment. Let Market Intelligence Guide Your Community's Next Hotel Project From a municipal standpoint, adding new hotel rooms to an area may attract and accommodate additional visitors during peak periods, but they may also cannibalize demand from other hotels in the same market during off-peak periods, negatively impacting tax revenue from those properties. In order to accurately assess potential benefits of a hotel development for a community, it is important to focus on net new demand to the market as the driver for tax growth, not just the anticipated performance of the newly constructed property. Additionally, the quality and scope of hotel facilities should be evaluated in relation to the needs and desires of community stakeholders to ensure the incentivized project is truly providing community benefits. In order to properly examine these potential benefits to a community, as well as the return on investment for a private developer, a hotel market and feasibility study should thoroughly evaluate the nature of hotel supply and demand in the local market, in addition to the performance, profitability, and return on investment for an individual proposed hotel project. When the perspectives and motivations of both public entities and private developers are addressed, such a study can serve as a key tool in bridging the gap between private and public stakeholders to support mutually beneficial hotel developments. At HVS, we turn data into powerful insights that drive your success. Our unique methodology involves conducting primary interviews within local markets, capturing real-time insights and data. This ensures a deep understanding of each market we operate in to give you a distinct competitive edge. When you partner with HVS, you gain access to the most current data, unlocking the nuances of local dynamics and empowering you to make confident, strategic decisions. For more information about a new hotel development in your market, or for assistance in making investment decisions that align with your specific goals and risk tolerance, we invite you to reach out to Dan McCoy, MAI.
Yahoo
5 days ago
- Business
- Yahoo
Stanley Fischer, Who Spread Macroeconomic Gospel, Dies at 81
(Bloomberg) -- Stanley Fischer, a professor and practitioner of macroeconomics who helped guide central banks in two countries, Israel and the US, and mentored a younger generation of economic decision-makers, has died. He was 81. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Where the Wild Children's Museums Are Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move NYC Congestion Toll Brings In $216 Million in First Four Months He died on Saturday, the Bank of Israel said in a statement, expressing condolences. Fischer, known as Stan, served as vice chairman of the US Federal Reserve from 2014 to 2017 following eight years as governor of the Bank of Israel, adding to a resume that included time at the Massachusetts Institute of Technology, spells at the International Monetary Fund and World Bank, and a stint as vice chairman of New York-based Citigroup Inc. The roster of MIT students he taught and advised included Ben S. Bernanke, who would go on to become Fed chair and called Fischer his mentor; Mario Draghi, a future European Central Bank president and prime minister of Italy; Lawrence Summers, who would serve as US Treasury secretary under Bill Clinton; Greg Mankiw, who would lead President George W. Bush's Council of Economic Advisers; Kazuo Ueda, named Bank of Japan governor in 2023; and IMF chief economists, including Olivier Blanchard, Ken Rogoff and Maurice Obstfeld. Countless other college undergraduates were introduced to the dismal science by Macroeconomics, the textbook Fischer wrote in 1978 with his MIT colleague, Rudi Dornbusch. The 13th edition of the book was published in 2018. 'It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence, through his own research, his students, and his policy decisions, on macroeconomic policy around the world,' Blanchard wrote of Fischer in 2023. Fischer and Blanchard co-authored Lectures on Macroeconomics, published in 1989. Dispatched on several occasions to extinguish economic emergencies around the world, Fischer drew academic lessons from his first-hand experience with countries in crisis. The pattern began in 1983, when George Shultz, then the US secretary of state, invited Fischer to serve on a joint US-Israeli team of experts helping Israel reverse a prolonged period of weak growth, triple-digit inflation and falling foreign exchange reserves. Their work resulted, in 1985, in an economic stabilization program combining a large reduction in government subsidies with the fixing of the exchange rate, a tightening of monetary policy, and wage and price controls — followed, crucially, by the US supplying a $1.5 billion two-year aid package. That was a prelude to Fischer's tenure as the No. 2 official at the IMF, the lender of last resort to countries in economic peril. Starting in 1994, Fischer traveled the globe to help resolve interrelated financial crises in Mexico, Russia, Brazil, Thailand, Indonesia and South Korea. His role meant he often overshadowed his boss, IMF Managing Director Michel Camdessus. But years later, Fischer credited Camdessus with keeping a sense of calm following the collapse of the Mexican peso in 1994, the first IMF crisis Fischer faced. Emergency Loans 'I thought Western civilization as we knew it was coming to an end,' but Camdessus 'had seen this particular play before,' Fischer recalled. The IMF provided about $250 billion in emergency loans during Fischer's seven years as first deputy managing director, ending in 2001. To accept Israel's 2005 offer to head its central bank, Fischer, an American citizen since 1976, added Israeli citizenship. He conducted business in Hebrew, with an accent that indicated his upbringing in southern Africa. Under his leadership, Israel's central bank was the first to cut rates in 2008 at the start of the global economic crisis, and the first to raise rates the following year in response to signs of financial recovery. In 2011, responding to a global downturn, the bank embarked on a series of rate cuts that pushed the benchmark from 3.25% to a record low 0.1% in 2015. Major changes enacted by Fischer during his eight-year tenure included shifting responsibility for the monthly interest-rate decision from the governor alone to a six-member Monetary Committee, including three outside academics. 'It is testament to Stan's skillful handling of Israel's economy that it is one of the very few advanced economies whose output increased every year through the crisis period,' former Bank of England Governor Mervyn King said in 2013. President Barack Obama appointed Fischer as vice chairman of the Fed Board of Governors under Janet Yellen. Fischer announced his retirement in 2017, a year before his four-year term was to end. He joined BlackRock Inc. as an adviser in 2019. Africa Upbringing Fischer was born on Oct. 15, 1943, in Mazabuka, a town in Zambia, the nation then known as Northern Rhodesia. His family was part of a close-knit community of Jews who had emigrated to southern Africa. His Latvian-born father, Philip, ran a general store. His mother, Ann, had been born in Cape Town, the daughter of Lithuanian immigrants, according to a Financial Times profile. At 13, the family moved to Zimbabwe, then called Southern Rhodesia, where Stanley became active in the Habonim, a Zionist youth group, along with Rhoda Keet, his future wife. In the early 1960s, he spent six months on a kibbutz on Israel's Mediterranean coastal plain, where he combined learning Hebrew with picking and planting bananas. He was introduced to economics through a course in his senior year in high school and moved to the UK to study at the London School of Economics, earning a bachelor's degree in 1965 and a master's in 1966. He chose MIT for his doctorate work so that he could study under future Nobel laureate economists Paul Samuelson and Robert Solow. He said he may have been drawn to macroeconomics 'because I was interested in big questions.' 'I had this image of the world as we knew it having nearly collapsed in the 1930s, and that these guys' — the macroeconomists — 'had saved it,' he said in a 2005 interview with Blanchard. He earned his Ph.D. in economics in 1969, worked as an assistant professor at the University of Chicago, then returned to MIT in 1973 as an associate professor. The first course he taught was monetary economics, alongside Samuelson. He became a full professor in 1977. Bernanke, who earned his Ph.D. from MIT in 1979, traced his interest in monetary policy to a conversation he had with Fischer — 'then a rising academic star' — in the late 1970s. 'Read This' He said Fischer handed him a copy of A Monetary History of the United States, 1867-1960 (1963), by Milton Friedman and Anna J. Schwartz, with the encouragement, 'Read this. It may bore you to death. But if it excites you, you might consider monetary economics.' Bernanke credited Fischer with popularizing the principle that while the Fed pursues goals set by the president and Congress, it has policy independence — freedom to use its tools as it sees fit to achieve those goals. As chief economist of World Bank from 1988 to 1990, Fischer visited China and India and became, he later said, 'gripped by the problem of development.' After Fischer left the IMF in 2001, he joined Citigroup Inc. as a vice chairman and drew on his experience to lead the bank's country risk committee. Fischer declared himself a candidate for the top role at the IMF in 2011, following the resignation of Dominique Strauss-Kahn. At 67, however, he was over the IMF's age limit of 65 for managing directors, meaning he would have needed a change in rules. The job went to Christine Lagarde. In 2013, Fischer was thought to be a possible candidate to succeed Bernanke at the helm of the Fed. Obama instead chose Yellen, with Fischer as her deputy. 'In a just world, Stan would have served at some point as Fed chairman or managing director of the IMF,' Summers wrote in 2017. 'Fate is fickle and it did not happen. But Stan through his teaching, writing, advising and leading has had as much influence on global money as anyone in the last generation. Hundreds of millions of people have lived better because of his efforts.' (Updates list of chief economists Fischer taught in fourth paragraph.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Will Small Business Owners Knock Down Trump's Mighty Tariffs? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
