Federal Reserve ramps up help to US economy on life support

WASHINGTON - The Federal Reserve launched an unprecedented effort on Monday to flood the US economy with money amid the chaos caused by the coronavirus pandemic, as Congress debated a rescue plan for American workers and companies.

Like patients around the world battling the disease itself, the US economy is on life support, with some forecasters projecting a 14 percent contraction in the April-June quarter while the global economy could shrink 1.5 percent this year.

About a third of Americans have been ordered to stay at home, and the Fed warned of "severe disruptions" from the virus as it rolled out another series of measures to pump funds into the economy, including buying unlimited amounts of government debt -- a move akin to printing money.

But while that should provide oxygen to the financial system and keep businesses open, lawmakers continued haggling over an emergency aid package, with Democrats in the House unveiling a proposal that would cost a whopping $2.5 trillion as they demanded more funds to help workers directly and more strings on any aid going to corporations.

President Donald Trump signaled his approval of the Fed's move last weeks to slash the benchmark lending rate to zero, saying central bank chair Jerome Powell had "done a really good job," in a reversal of previous criticism over his refusal to lower rates.

The president also praised the strong US dollar but acknowledged it makes "trade much tougher" -- an unusual statement from an American president, who typically don't comment on the currency's value.

Treasury Secretary Steven Mnuchin spent the day meeting with congressional leaders, and played down Democratic concerns about taxpayers coming to the rescue of major corporations. 

"I want to be clear, there are no bailouts," he said on Fox Business Network. "This isn't corporate welfare. This helps all American workers."

EXISTENTIAL THREAT

Mnuchin said the Fed's measures would provide $4 trillion in needed liquidity into the US economy.

The Fed had already announced it would buy at least $500 billion of Treasury debt as well as $200 billion of mortgage-backed debt, but now has committed to buying "in the amounts needed to support smooth market functioning." 

The Fed's New York branch, which handles the financial transactions, said it would start out by purchasing $75 billion per-day in Treasuries and $50 billion per-day in mortgage-backed securities.

In the latest action, the Fed revived facilities it last used during the 2008 global financial crisis, and expanded others announced in recent days, including buying debt issued by US municipalities and by corporations. 

In addition, the Fed said it would soon unveil a program to lend directly to small- and medium-sized companies -- those that have been hardest hit by the near complete shutdown of the US economy as authorities fight to contain the spread of the virus.

"While great uncertainty remains, it has become clear that our economy will face severe disruptions," the Fed said in a statement, pledging to use all available tools to contain the damage.

"Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."

CONGRESSIONAL INTERVENTION

Economists praised the effort, but said massive stimulus from Congress is still needed.

"The downturn is not avoidable. The economic carnage associated with downturn can be mitigated so that there is an economy left to ramp up," said Diane Swonk, chief economist at Grant Thornton.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, offered an equally dire warning: "The near-term threat to the economy is existential."

The central bank actions represent "an all-out effort to ensure that the business sector can continue to exist even as economic activity temporarily collapses. The Fed is now effectively the direct lender of last resort to the real economy, not just the financial system."

The central bank pledged to "continue to use its full range of tools to support the flow of credit to households and businesses."

One of the programs, the Term Asset-Backed Securities Loan Facility (TALF), will help backstop recent student loans, car loans and credit card debt as well as small business loans.

Agence France-Presse

White House seeking $850 billion stimulus package: report

WASHINGTON - US President Donald Trump will ask Congress to approve a massive $850 billion emergency spending package to contain the growing economic damage from the coronavirus pandemic, according to media reports Tuesday.

The measures are expected to include a payroll tax cut and $50 billion in aid to troubled US airlines hit hard by the near total shutdown in the travel industry, The Washington Post reported, citing four officials familiar with the matter.

The package, which is in addition to the $100 billion in spending directed at paid sick leave and expanded unemployment benefits already moving through Congress, surpasses the $700 billion emergency program known as TARP to save the banking system during the 2008 global financial crisis.

Treasury Secretary Steven Mnuchin is expected to present the proposal to Senate Republicans, the Post reported.

Republican leaders last week dismissed the Democratic package in the house as an inflated wish list of items. And since then the damage has accelerated with businesses forced to close and whole states under lockdown.

Trump has been pushing for a cut or suspension of taxes deducted from all American paychecks at least through the November presidential election.

But Democrats and many economists say focus on payroll taxes misses workers who are laid off, unemployed or are paid hourly.

Most economists agree the crisis calls for a massive response to flood the economy with cash to keep households and businesses afloat.

The Federal Reserve has slashed the benchmark lending rate to zero, where it was during the 2009 global financial crisis.

It has taken extraordinary steps to ensure the financial system has plenty of cash to keep it from locking up, but Fed Chair Jerome Powell said a fiscal response will be "critical."

source: news.abs-cbn.com

US and China seeking to revive trade talks: Trump adviser

WASHINGTON -- Washington and Beijing are working to revive pivotal talks aimed at ending the trade war that has roiled world markets, Donald Trump's chief economic advisor said Sunday.

If calls between both sides' deputies pan out in the next 10 days "and we can have a substantive renewal of negotiations," Larry Kudlow said on "Fox News Sunday," "then we are planning to have China come to the USA and meet with our principals to continue the negotiations."

The US president himself weighed in on Twitter, saying, "We are doing very well with China, and talking!"

In another tweet, he added that the US economy was "poised for big growth after trade deals are completed," and that China is "eating Tariffs."

Yet it was unclear whether a Chinese delegation would be coming to Washington next month, as a White House spokesperson predicted in July after US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin left a round of trade talks in Shanghai.

Kudlow nonetheless emphasized that high-level phone discussions last week were "a lot more positive than has been reported."

The talks involved Lighthizer and Mnuchin on the US side and Vice Premier Liu He and Commerce Secretary Zhong Shan representing China.

World financial markets have been on edge amid signs pointing to a possible global economic slowdown -- notably because of the trade war between the world's two largest economies -- and have been reacting nervously to even the slightest new indicator.

NO FEAR OF 'OPTIMISM'

But Kudlow insisted that the outlook was far from gloomy.

"Let's not be afraid of optimism," he said, adding that "I sure don't see a recession."

The US-China negotiations began in earnest in January and seemed at first to make progress, raising hopes that a trade deal could be rapidly reached. 

But during the spring, the US president abruptly called off the talks, saying the Chinese had reneged on earlier commitments. 

The discussions resumed in June at the highest levels in the margins of the G-20 summit meeting in Osaka, Japan, when Trump met with his Chinese counterpart Xi Jinping.

But markets were hit with a fresh surprise when Trump suddenly announced that as of Sept. 1 he was imposing punitive 10-percent tariffs on $300 billion in Chinese goods that had so far been spared. 

Then came the announcement Tuesday that Trump -- presumably with an eye on the 2020 elections -- would delay imposing the tariffs until Dec. 15 so as not to cast a shadow on Americans' Christmas shopping plans.

The delay was seen as a concession to China and a backhanded admission that the tariffs -- despite Trump's repeated insistence to the contrary -- could in fact affect US consumers.

IMPACT ON AMERICA DENIED

Nonetheless, the president's chief trade adviser, Peter Navarro, firmly rejected that notion in television appearances Sunday.

He said Trump had decided on the postponement only after several company heads told him their contracts with Chinese suppliers were denominated in dollars, meaning they got no benefit from the weakening of the Chinese yuan and their orders ahead of the year-end holidays would be hard-hit. 

Navarro vigorously rejected the notion that the tariff war is hurting American consumers -- despite studies to the contrary by the International Monetary Fund, Harvard University and the Federal Reserve Bank of Boston.

"We're seeing production investment and supply-chain sourcing move -- hemorrhaging from China," Navarro said, with Southeast Asia and the US benefiting.

source: news.abs-cbn.com

US designates China as a 'currency manipulator'

WASHINGTON - The United States on Monday formally named China a currency manipulator, accusing Beijing of weakening the yuan as the two countries' trade war escalates.

The move came as China earlier on Monday allowed its currency to fall to its weakest levels against the dollar in almost a decade, prompting irate Twitter outbursts from US President Donald Trump and sending global equities markets diving into the red.

Treasury Secretary Steven Mnuchin "under the auspices of President Trump, has today determined that China is a currency manipulator," the US Treasury Department said in a statement.

The yuan fell below 7 to the dollar on Monday, days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports, while accusing Beijing of failing to live up to commitments in negotiations to end the two nation's year-long trade war.

The move marked a sudden change of US policy.

Trump had campaigned on a pledge to designate China a currency manipulator, but since he took office the Treasury had refrained from doing so -- until Monday.

As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the Treasury said.

In its most recent report, the department had kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices.

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White House to host meeting with tech executives on Huawei ban: sources

WASHINGTON - White House economic adviser Larry Kudlow will host a meeting with semiconductor and software executives on Monday to discuss the US ban on sales to China's Huawei Technologies Co. Ltd., two sources briefed on the meeting said on Friday.

Treasury Secretary Steven Mnuchin will also attend the White House event, to which chipmakers Intel Corp. and Qualcomm Inc. have been invited, the sources said.

A White House official confirmed the meeting would take place, noting that Google and Micron would attend, but said it had been called to discuss economic matters.

The subject of Huawei was expected "to come up but that it is not the reason why they are convening the meeting," said the official, who spoke on condition of anonymity.

The future of US companies' ties to Huawei, the world's top maker of telecommunications equipment, remains uncertain after the Trump administration put the company on a blacklist in May, citing national security concerns.

The move banned US companies from selling most US parts and components to it without special licenses, but President Donald Trump said last month American firms could resume sales, with an eye on reviving trade talks with Beijing.

Several weeks after the announcement, details about what the new policy towards the company is are still not forthcoming.

Commerce Department Secretary Wilbur Ross has said licenses would be issued where there is no threat to national security. Reuters reported that the United States may approve licenses for companies to restart new sales in a matter of weeks.

One of the people briefed on Monday's meeting said Broadcom Inc. was also invited to the White House event. Microsoft Corp. was also expected to receive an invitation, the person said.

Intel and Qualcomm declined to comment. Google, Micron, Microsoft and Broadcom did not immediately respond to requests for comment.

source: news.abs-cbn.com

Facebook needs 'very high standard' for Libra coin: US Treasury

WASHINGTON - Facebook must meet "a very high standard" before it moves ahead with its planned digital currency Libra, US Treasury Secretary Steven Mnuchin said Monday.

Mnuchin said US regulators have already expressed concerns to Facebook about the plan for a global cryptocurrency, noting that these kinds of virtual coins have in the past been associated with money laundering and illicit activities.

"Whether they're banks or non-banks, they're under the same regulatory environment," Mnuchin told reporters at the White House, adding that Facebook "will have to have a very high standard before they have access to the financial system."

Facebook last month unveiled its plans for Libra, widely regarded as a challenger to dominant global player bitcoin. Expected to launch in the first half of 2020, Libra is designed to be backed by a basket of currency assets to avoid the wild swings of bitcoin and other cryptocurrencies.

Mnuchin said the US Treasury welcomes "responsible innovations" that can improve the efficiency of the financial system but added: "Our overriding goal is to maintain the integrity of the financial system and protect it from abuse."

'NATIONAL SECURITY ISSUE' 

He said US regulators have met with Facebook officials on this question, and how Facebook can protect against the new virtual coin being used for criminal activity.

"This is indeed a national security issue," the Treasury chief said.

Facebook, he added, must implement safeguards against the use of Libra for money laundering and terrorist financing and comply with other financial regulations.

Commenting on Facebook's claim that Libra could lower costs and help people without access to traditional financial services, Mnuchin said, "That's fine (but) they've got a lot of work to do to convince us they can get to that place."

Mnuchin's comments echoed concerns voiced by Federal Reserve Chairman Jerome Powell and regulators around the world, as well as by lawmakers set to open hearings this week on the plan by Facebook and its partners in the Libra project.

HEARING SET TUESDAY 

David Marcus, who heads Facebook's digital wallet and blockchain efforts, said in testimony prepared for delivery Tuesday that he expects regulators to carry out an extensive review of the Libra project.

"The time between now and launch is designed to be an open process and subject to regulatory oversight and review," Marcus was to say in his remarks, which were released by the Senate Banking Committee.

"We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals."

Marcus said that Libra, whose association will be based in Geneva, will be supervised by the Swiss Financial Markets Supervisory Authority, but would also register with the US Treasury's FinCEN (Financial Crimes Enforcement Network) to comply with anti-money laundering regulations.

Facebook "will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy," Marcus added.

The companies behind Libra include payment giants Visa, MasterCard and PayPal, as well as ride-hailing apps Lyft and Uber.

Central bankers around the world have said they would carefully study the proposed currency and last week US President Donald Trump weighed in.

"I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," he said.

source: news.abs-cbn.com

China backtracked on nearly all aspects of US trade deal- Reuters sources

WASHINGTON/BEIJING - The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world's two largest economies, according to three US government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core US demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

US President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China's Vice Premier Liu He to Washington to continue trade talks.

The stripping of binding legal language from the draft struck directly at the highest priority of US Trade Representative Robert Lighthizer - who views changes to Chinese laws as essential to verifying compliance after years of what US officials have called empty reform promises.

Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.

"This undermines the core architecture of the deal," said a Washington-based source with knowledge of the talks.

"PROCESS OF NEGOTIATION"

Spokespeople for the White House, the US Trade Representative and the US Treasury Department did not immediately respond to requests for comment.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a "process of negotiation" and that China was not "avoiding problems".

Geng referred specific questions on the trade talks to the Commerce Ministry, which did not respond immediately to faxed questions from Reuters.

Lighthizer and US Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump's tariff order but did not provide details on the depth and breadth of the revisions.

Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfill its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China's history of failing to fulfill reform pledges.

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because "China got greedy".

"China reneged on a dozen things, if not more ... The talks were so bad that the real surprise is that it took Trump until Sunday to blow up," the source said.

"After 20 years of having their way with the US, China still appears to be miscalculating with this administration."

FURTHER TALKS THIS WEEK

The rapid deterioration of negotiations rattled global stock markets, bonds and commodities this week. Until Sunday, markets had priced in the expectation that officials from the two countries were close to striking a deal.

Investors and analysts questioned whether Trump's tweet was a negotiating ploy to wring more concessions from China. The sources told Reuters the extent of the setbacks in the revised text were serious and that Trump's response was not merely a negotiating strategy.

Chinese negotiators said they couldn't touch the laws, said one of the government sources, calling the changes "major."

Changing any law in China requires a unique set of processes that can't be navigated quickly, said a Chinese official familiar with the talks. The official disputed the assertion that China was backtracking on its promises, adding that US demands were becoming more "harsh" and the path to a deal more "narrow" as the negotiations drag on.

Liu is set to arrive in Washington on Thursday for two days of talks that just last week were widely seen as pivotal – a possible last round before a historic trade deal. Now, US officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.

To avert escalation, some of the sources said, Liu would have to scrap China's proposed text changes and agree to make new laws. China would also have to move further towards the US position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered US crops.

The administration said the latest tariff escalation would take effect at 12:01 a.m. Friday (0401 GMT), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners and furniture.

The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.

Mnuchin - who has been more open to a deal with improved market access, and at times clashed with Lighthizer – appeared in sync with Lighthizer in describing the changes to reporters on Monday, while still leaving open the possibility that new tariffs could be averted with a deal.

Trump's tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, "come Friday, there will be tariffs in place." 

(Additional reporting by Chris Prentice in NEW YORK, and Jing Xu and Ben Blanchard in BEIJING Editing by Simon Webb and Brian Thevenot)

source: news.abs-cbn.com

US stocks boosted by report of possible lifting of China tariffs

NEW YORK, United States -- Wall Street stocks climbed for a third straight session on Thursday following a report the US could lift sanctions on China while leading bourses in Europe and Asia retreated.

US stocks were little changed through early afternoon but suddenly jumped higher after The Wall Street Journal reported Treasury Secretary Steven Mnuchin had proposed lifting some or all tariffs on China as a way to reassure markets and bolster the odds of a bigger trade deal.

But the article described the idea as part of a policy debate between Mnuchin and US Trade Representative Robert Lighthizer, who is more hawkish on China.

The Treasury Department told AFP on Thursday that no formal recommendation had been made by either Mnuchin or Lighthizer in the talks, which were "nowhere near completion."

Among those shares that got a boost, Boeing, Caterpillar and General Motors gained at least one percent. All three depend on China for a significant portion of sales.

Worries about the US-China trade war had been a headwind earlier in the US session and a factor in down sessions across major European and Asian markets following reports that US officials were carrying out a criminal probe into Chinese tech giant Huawei and could soon bring indictments over allegations of theft of trade secrets from its American business partners.

US lawmakers have also introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.

POUND RISES

Meanwhile, in Britain, Prime Minister Theresa May scrambled to put together a new Brexit strategy with cross-party talks after MPs sparked political turmoil by rejecting her previous agreement with the EU.

May reached out to rival parties shortly after surviving a no-confidence vote on Wednesday, hoping to hammer out a Brexit fix that she could present to parliament next week.

Despite the impasse, the pound rose again against both the dollar and the euro.

"The market assumes that at very least the status quo will prevail and at minimum Article 50 will be delayed until a more palatable solution is found," said BK Asset Management's Boris Schlossberg.

"But the state of uncertainty is taking its toll on UK business and there is little doubt that any and all investment planning has come to a grinding halt," he added.

source: news.abs-cbn.com

Stocks under a cloud as US political tumult adds to growth anxiety

TOKYO -- Global stock markets headed into the year-end under a heavy cloud after another rout this week as US political uncertainty added to heightened concerns over slowing global economic growth.

Asian equities were shaky on Wednesday following a Christmas eve Wall Street plunge, as investors were unnerved by US political developments including a US federal government shutdown and President Donald Trump's hostile stance towards the Federal Reserve chairman.

US Treasury Secretary Steven Mnuchin had also raised market concerns by convening a crisis group amid the pullback in stocks.

S&P 500 emini futures moved in and out of the red and were last down 0.1 percent, pointing towards a subdued start for Wall Street when the U.S. market reopens after Christmas Day, when many of the world's financial markets were shut.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.15 percent.

The Shanghai Composite Index inched down 0.1 percent while South Korea's KOSPI shed more than 1 percent.

Japan's Nikkei bounced 0.75 percent after diving 5 percent the previous day to a 20-month low and slipping into bear market territory.

"In addition to concerns towards the US economy, the markets are now having to grapple with growing turmoil in the White House which has raised political risk ahead of the year-end," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

US stocks have dropped sharply in recent weeks on concerns over weaker economic growth. Trump has largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.

That has further rattled investors as they grappled with fears of slowing global growth, corporate earnings and US-China trade tensions.

In an effort to reassure investors, Treasury Secretary Mnuchin spoke on Sunday with the heads of the 6 largest US banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly."

US bond yields have declined as the market rout, including a steep sell-off in oil, prompted investors to move into safe-haven government debt, adding to the growing pressure on the dollar.

The dollar traded at 110.44 yen after retreating to a four-month low of 110.00 overnight against its Japanese peer, which tends to attract demand as a perceived safe-haven during times of market volatility and economic stress.

The euro was 0.2 percent higher at $1.1412.

The 10-year US Treasury note yield stood at 2.745 percent following a descent on Monday to 2.733 percent, its lowest since early April.

In commodities, US crude futures were up 0.95 percent at $42.94 per barrel after tumbling 6.7 percent on Monday.

US crude futures plunged to the lowest level since June 2017 on Monday, as bearish stocks added to fears of an economic slowdown.

Brent crude futures were down 0.35 percent at $50.29 a barrel, having skidded 6.2 percent in the previous session to their weakest since August 2017.

Safe-haven gold was well bid, with spot prices brushing a six-month peak of $1,272.11 per ounce.

source: news.abs-cbn.com

Trump has discussed firing Fed Chairman Powell - sources

WASHINGTON - US President Donald Trump has privately discussed the possibility of firing Federal Reserve Chairman Jerome Powell, a move that could roil already volatile financial markets, two sources familiar with situation said on Saturday.

The sources added that they do not expect Trump to dismiss the US central bank chief, despite the president's public and private objections to the Fed's interest rate-hiking campaign and his repeated criticisms of Powell, whom he appointed.

US Treasury Secretary Steven Mnuchin, however, tweeted late Saturday that Trump had told him that never suggested dismissing the Fed chief.

"I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so," Mnuchin quoted Trump as telling him.

The White House and a Fed spokeswoman declined to comment.

An attempt to remove the Fed chairman would be unprecedented and seen as an attack on the US central bank's independence, which is meant to insulate it from political considerations. It would be on potentially shaky legal ground, and would probably hit financial markets around the globe hard.

The Federal Reserve Act allows a president to dismiss a Fed board member for "cause," and Trump's frustrations with the central bank's rate hikes would likely fall short of that mark. The law, however, is untested on dismissing a chairman, who also holds a separate term as a board member.

Trump's top economic adviser, Larry Kudlow, said in November he did not believe it would be possible for Trump to remove Powell as chairman, while leaving him on the board.

"I don't think so. It's a four-year term," Kudlow said during a Washington Post event.

CNN, citing two people familiar with the matter, said Trump had begun polling advisers about his legal authority, but that the White House had not come up with a final determination. It said Trump's advisers told the president earlier this year that it was doubtful he had legal authority to dismiss the Fed chief.

Trump has frequently attacked Powell, who was sworn in as Fed chairman early last February, and the Fed for raising borrowing costs this year, especially as U.S. stocks have tumbled and yields on U.S. government debt have begun to signal a possible recession ahead.

Before the central bank's policy meeting earlier this week, Trump warned against lifting rates when stock markets were slumping.

"Don't let the market become any more illiquid than it already is," he wrote on Twitter on Tuesday, just before the Fed opened its two-day meeting. "Feel the market, don’t just go by meaningless numbers."

Despite the public jaw-boning, the central bank lifted rates for the fourth time this year on Wednesday, citing the U.S. economy's continued strong performance.

U.S. stocks and bond yields fell hard after the decision. The Dow Jones industrial average had its worst week since the 2008 financial crisis, while the Nasdaq sank into bear market territory.

Bloomberg News was the first to report that Trump has been privately discussing firing Powell.

The Fed's independence has been a mainstay of the U.S. financial system and is one of the reasons the dollar is the global reserve currency.

In an interview with Reuters earlier this month, Trump said he liked Powell, but not his policies.

"I think he's a good man. I think he's trying to do what he thinks is best. I disagree with him," Trump said. "I think he's being too aggressive, far too aggressive, actually far too aggressive." (Reporting by Steve Holland in Washington; Additional reporting by Tomo Uetake in Tokyo; Writing by Tim Ahmann and Diane Bartz Editing by Leslie Adler and James Dalgleish)

source: news.abs-cbn.com

World stocks climb, oil falls as trade tensions ease

NEW YORK -- Stocks rose Tuesday as investors welcomed apparent moves by the United States and China to restart trade talks while oil prices slid following an offer by US President Donald Trump to meet with his Iranian counterpart.

Investors were cheered by a Bloomberg News report that senior US and Chinese officials are seeking to restart negotiations to end an escalating trade war. 

That came after Treasury Secretary Steven Mnuchin last week said "some quiet conversations" were underway, and the US was ready to reopen talks "any time China is willing to seriously negotiate."

Solid earnings and economic data also supported the gains, analysts said.

US tariffs on another $16 billion (13.7 billion euros) of Chinese imports could go into effect in coming weeks, following levies on $34 billion imposed earlier this month, which prompted a tit-for-tat response from Beijing against US agricultural goods and other. 

That would be followed by US tariffs on another $200 billion in Chinese goods.

"Equity markets are in positive territory as trade tensions between the US and China are improving," said analyst David Madden at CMC Markets UK. 

"Traders took this as a positive sign and were encouraged to snap up stocks on the back of it."

The broad-based S&P 500 finished 0.5 percent higher, with industrial companies such as Caterpillar and Honeywell International posting strong gains.

In Europe, London stocks closed 0.6 percent higher, boosted by strong second-quarter BP results.

Paris added 0.4 percent and Frankfurt edged 0.1 percent higher.

$1 TRILLION APPLE?

Meanwhile, oil prices dropped after Trump seemed to jettison bellicose threats against Iran on Monday, saying in a dramatic about-face that he was willing to meet the country's leaders without preconditions.

A volley of saber-rattling tweets had raised tensions in oil markets, which are already concerned about supplies as US sanctions coming back into force in November aim to choke off Iranian oil exports.

Supply fears were also eased by an OPEC survey showing that output had increased.

"Recently, traders have been fearful about future supply given the impending sanctions on Iran, but they are happy to dump oil in light of the OPEC news," said Madden at CMC Markets UK. 

The main international benchmark, Brent crude, fell 72 cents while the main US benchmark, WTI, dropped $1.37.

Earlier, Asian equities traded mixed as the Bank of Japan tweaked its monetary policy in a bid to make its massive easing program sustainable.

Tokyo's key Nikkei index closed marginally higher after the Bank of Japan revised its inflation forecasts down, while making minor changes to its ultra-loose monetary policy for the first time in nearly two years.

Technology shares, the biggest losers during a sharp three-day pullback in the US, rallied higher.

Facebook climbed 0.9 percent, Microsoft and Netflix both 0.7 percent.

Apple, which was set to report earnings later Tuesday, advanced 0.2 percent.

KEY FIGURES AT 2030 GMT (4:30 a.m. Wednesday in Manila)

New York - Dow Jones: UP 0.4 percent to 25,415.19 (close)

New York - S&P 500: UP 0.5 percent at 2,816.29 (close)

New York - Nasdaq: UP 0.6 percent at 7,675.19 (close)

London - FTSE 100: UP 0.6 percent at 7,748.76 (close)

Frankfurt - DAX 30: UP 0.1 percent at 12,805.50 (close)

Paris - CAC 40: UP 0.4 percent at 5,511.30 (close)

EURO STOXX 50: UP 0.5 percent at 3,529.40 (close)

Hong Kong - Hang Seng: DOWN 0.5 percent at 28,583.01 (close)

Shanghai - Composite: UP 0.3 percent at 2,876.40 (close)

Tokyo - Nikkei 225: UP less than 0.1 percent at 22,553.72 (close)

Euro/dollar: DOWN at $1.1697 from $1.1706 at 2100 GMT

Pound/dollar: DOWN at $1.3127 from $1.3133

Dollar/yen: UP at 111.81 yen from 111.04 yen

Oil - Brent Crude: DOWN 72 cents at $74.25 per barrel

Oil - West Texas Intermediate: DOWN $1.37 at $68.76 per barrel

source: news.abs-cbn.com

Global stocks sink on festering trade war

NEW YORK -- World stock markets sank Monday on worries over a festering global trade war amid reports President Donald Trump plans new curbs on Chinese investment in America.

The selloff, which began in Asia, and continued through the European and US sessions, rendered trading screens a sea of red across the globe.

"Stocks got hit pretty hard on Monday amid escalated fears that the US and China are headed towards a full-blown trade war," said Briefing.com.

Trump has threatened to strike back against China's retaliation to the US tariffs that are due to take effect July 6 -- potentially escalating the tariffs to $450 billion in Chinese goods. 

The administration has also announced plans to by June 30 impose investment restrictions on Chinse companies. 

According The Wall Street Journal, the measures likely would target investments in the United States by any firm that is 25 percent Chinese held, although that threshold could drop if the investment is considered sensitive. 

But Treasury Secretary Steven Mnuchin rebuffed the reports.

In any case, markets were a in a brittle state, absorbing the expected China move as a continuation on Trump's threat Friday to impose a 20-percent tariff on auto imports from the European Union in response to EU tariffs.

Frankfurt, Paris and London all lost around 2 percent or more.

"Markets start the week on a risk-off tone after President Trump threatened to impose tariffs on imported cars from Europe -- and he is now planning to curb Chinese investments in 'sensitive' US industries," said analyst Konstantinos Anthis at traders ADS Securities. 

US indices also sank to two percent at their low point but recovered some of those losses following an afternoon television interview with senior White House economic adviser Peter Navarro, who tried to calm investor fears about a possible trade war. 

The Dow finished down 1.3 percent.

"Downside risks to the economic outlook are rising, with escalating trade tensions currently at the forefront of investors' minds," wrote Citi analysts in a research note.

"The next few months will show if these tensions are likely to deteriorate towards full-scale trade war.

"Whether or not they do, the uncertainty is probably already damaging confidence and investment."

But CFRA Research's Sam Stovall said US economic growth and earnings forecasts "remain solid" despite some downside risks.

"The biggest uncertainty continues to be the simmering global trade tensions that we currently think will not morph into a full-blown trade war," Stovall said. "However, we see volatility remaining elevated."

KEY FIGURES AROUND 2100 GMT (5 a.m. Tuesday in Manila)

New York - Dow Jones: DOWN 1.3 percent at 24,252.80 (close)

New York - S&P 500: DOWN 1.4 percent at 2,717.07 (close)

New York - Nasdaq: DOWN 2.1 percent at 7,532.01 (close)

London - FTSE 100: DOWN 2.2 percent at 7,509.84 (close) 

Frankfurt - DAX 30: DOWN 2.5 percent at 12,270.33 (close)

Paris - CAC 40: DOWN 1.9 percent at 5,283.86 (close)

EURO STOXX 50: DOWN 2.1 percent at 3,369.21 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 22,338.15 (close)

Hong Kong - Hang Seng: DOWN 1.3 percent at 28,961.39 (close)

Shanghai - Composite: DOWN 1.1 percent at 2,859.34 (close)

Euro/dollar: UP at $1.1704 from $1.1651 at 2100 GMT

Pound/dollar: UP at $1.3281 from $1.3261

Dollar/yen: DOWN at 109.77 yen from 109.97 yen

Oil - Brent Crude: DOWN 82 cents at $74.73 per barrel

Oil - West Texas Intermediate: DOWN 50 cents at $68.08 per barrel

source: news.abs-cbn.com

US Treasury chief's wife apologizes over Instagram post

WASHINGTON - The wife of US Treasury Secretary Steven Mnuchin apologized on Tuesday after she posted an Instagram photo and comments that were slammed as tone deaf and elitist.

Louise Linton, 36, who is also a Scottish actress, posted a photo to the social network on Monday night that showed her descending with Mnuchin from an official US government plane. She tagged her designer clothing and accessories, including Tom Ford sunglasses, an Hermes scarf and Valentino heels.

The husband and wife had just returned from a trip to Kentucky, where Mnuchin addressed the Louisville Chamber of Commerce and visited the US Bullion Depository at Fort Knox.

The Commerce Department estimates that about 18.5 percent of Kentuckians live in poverty.

A user, jennimiller29, left a comment accusing Linton of freeloading on the taxpayer's dime: "Glad we could pay for your little getaway. #deplorable."

Linton was apparently unable to resist a lengthy rebuttal: "Aw!!! Did you think this was a personal trip?! Adorable!" she wrote. "Do you think the the US govt paid for our honeymoon or personal travel?! Lololol."

Linton also said that by virtue of their wealth, she and Mnuchin contributed more to society than jennimiller29.

"Have you given more to the economy than me and my husband? Either as an individual earner in taxes OR in self sacrifice to your country?" Linton wrote. "Pretty sure the amount we sacrifice per year is a lot more than you'd be willing to sacrifice if the choice was yours."

"You're adorably out of touch."

By Tuesday morning, Linton's post had reportedly been removed from her Instagram account, which was no longer publicly accessible.

She also issued an apology through her publicist later in the day.

"I apologize for my post on social media yesterday as well as my response. It was inappropriate and highly insensitive," Linton said in the statement given to AFP.

A Treasury Department spokesperson told AFP the couple were reimbursing the federal government for Linton's travel.

"She receives no compensation for the products she mentions," the spokesperson added.

A former Goldman Sachs executive, Hollywood producer and banker, Mnuchin is a prominently wealthy member of the Trump administration, one of the richest in recent memory.

Fortune magazine estimates Mnuchin's net worth is as high as $500 million.

During Senate confirmation, he faced awkward questions about previously undisclosed offshore investment firms and real estate holdings of about $100 million.

Linton posed earlier this year for the magazine Town and Country, exhibiting the lavish diamond and pearl jewelry she wore at her June wedding to Mnuchin.

The other Instagram user, identified by The New York Times as Jenni Miller, a 45-year-old mother of three from Oregon, told the paper Linton had gone on a "rant" to make herself appear "smarter, better, richer -- all those things."

"If she hadn't made her account private, I would have written back with a very snide Marie Antoinette joke," Miller said.

source: news.abs-cbn.com

Trump believes in 'reciprocal' free trade: Treasury chief

The United States, which is considering new protectionist policies, believes in "free and fair" trade, US Treasury Secretary Steven Mnuchin said Saturday.

"President Trump's agenda is to make sure that we have free and fair trade and I think, as you know, the United States is probably the most open trading market there is for both goods, services and investment," Mnuchin said.

But he said the United States expected to be treated as it treats others.

"The president believes in reciprocal trade deals and reciprocal free trade."

Mnuchin's comments came during a public conversation with Christine Lagarde, head of the International Monetary Fund, during the spring meetings of the IMF and World Bank, which are to wind down on Sunday.

With a nationalist economic agenda, the Trump administration has vowed to upend decades of prevailing trade policy by renegotiating or scrapping trade agreements, imposing tariffs and moving to bilateral trade agreements.

US pressure last month forced a Group of 20 finance ministers meeting in Germany to strike the routine commitment against protectionist policies from a closing statement.

The word "protectionism" also did not appear in the final statement of this week's meetings at the IMF.

"If our markets are open, there should be a reciprocal nature to other people's markets," Mnuchin said Saturday.

"What's not free and fair is if our market is open and other people either have high tariffs or have high import barriers."

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source: news.abs-cbn.com

US wants free but fair and balanced trade: treasury chief

The United States remains committed to free trade but wants to re-examine some trade deals and correct their excesses, US Treasury Secretary Steven Mnuchin said on Saturday after G20 finance chiefs backtracked on past commitments about trade.

Making only a token reference to trade in their communique, finance ministers and central bank chiefs from the world's top 20 economies broke with a decade-long tradition of endorsing open trade, a clear defeat for host nation Germany, which has fought to maintain the G20's past commitments.

"What was in the past communique is not necessarily relevant from my standpoint," Mnuchin told a news conference in Baden Baden after his first meeting with the finance chiefs of the world's 20 biggest economies.

"I understand what the president's desire is and his policies, and I negotiated them from here. I couldn’t be happier with the outcome," Mnuchin said.

In the new U.S. administration's biggest clash yet with the international community, G20 finance chiefs rowed back on a pledge to reject protectionism and maintain an open and inclusive global trade system.

"We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people," Mnuchin said.

"Having said that, we want to re-examine certain agreements," Mnuchin said, adding that NAFTA would have to be reviewed, some WTO rules needed to be better enforced and older agreements may have to be renegotiated.

Although the government is also reviewing financial regulation, Mnuchin pledged support for the now stalled Basel III accord, a major global attempt to regulate lenders consistently.

"We’re hopeful there will be a resolution on the Basel III/IV changes," Mnuchin said. "We need to make sure we bring unity to the international market."

Man killed at Paris airport planned to 'die for Allah': prosecutor
(Reporting by Balazs Koranyi and David Lawder; editing by David Clarke/Ruth Pitchford)

source: news.abs-cbn.com

Asian shares edge up, await Trump's policy speech

TOKYO - Asian shares edged up on Tuesday, bolstered by gains on Wall Street as investors awaited a speech by US President Donald Trump for signals on tax reform and infrastructure spending.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent in early trading, while Japan's Nikkei stock index got a tailwind from a weaker yen and gained 0.7 percent.

On Monday, US stocks edged up, with the Dow Jones Industrial Average closing at a record high for a 12th straight session, after Trump said he would talk about his plans for "big" infrastructure spending in his first major policy address to Congress on Tuesday (10 a.m. Wednesday in Manila).

"This could be like the case of his inauguration speech, in which expectations were high, but he didn't come up with any concrete details," said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank.

"The market does not want a repeat of that, and wants to hear some actual plans, or there will be disappointment," she said.

Treasury Secretary Steven Mnuchin said in a televised interview on Sunday that Trump would use the event to preview some elements of his sweeping tax reform plans.

Trump will seek to boost Pentagon spending by $54 billion in his first budget proposal and slash the same amount from non-defense spending, including a large reduction in foreign aid, a White House budget official said.

The dollar added 0.1 percent to 112.80 yen, pulling away from Monday's nadir of 111.920, which was its lowest since Feb. 9. The euro edged down slightly on the day to $1.0583 .

Hawkish comments from a US Federal Reserve official also bolstered US Treasury yields and underpinned the dollar.

Dallas Fed President Robert Kaplan said on Monday that the Fed might need to raise interest rates in the near future to avoid falling behind the curve on inflation.

The yield on benchmark 10-year US Treasuries, which had slumped to more than five-week lows last week, stood at 2.359 percent in Asian trade, compared to their US close of 2.367 percent on Monday.

Crude oil prices were steady, as expectations of higher US crude production offset reports of high compliance with OPEC's production cut agreement.

US crude was up slightly on the day at $54.08 per barrel.

Spot gold edged up slightly to $1,253.24 an ounce but remained shy of a 3-1/2-month peak scaled on Monday as investors awaited Trump's speech.

source: news.abs-cbn.com

Asian shares off 1 1/2-yr high, Trump's yuan comment in focus

TOKYO - Asian shares took a breather on Friday, hovering just below 1-1/2-year highs as investors braced for a potentially wobbly session after US President Donald Trump called China "grand champions" of currency manipulation.

Over the past month or so, financial markets have been buffeted by rising protectionism under the Trump administration, and the President's latest comments on China does little to raise confidence on trade relations between the world's two biggest economies.

His comments came just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices.

The offshore yuan stood flat at 6.8476 per dollar. In onshore trade, the yuan fell 6.6 percent last year in its biggest drop in over 20 years. All eyes are on the Chinese markets which open shortly.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent in early trade after four straight days of gains while Japan's yen-sensitive Nikkei was off 0.7 percent.

The MSCI world equity index, which tracks shares in 46 nations, rose 0.15 percent to 446.69 on Thursday, touching a record peak at 447.67 at one point and extending its gains so far this year to almost six percent.

Leading the gains were emerging markets, which have rallied more than 10 percent since the start of the year, thanks to signs of a pickup in global economic activity.

On Wall Street, the Dow managed to notch a record high for a tenth straight session, the longest streak since 1987. The streak of gains is the longest for the index since March 2013.

Traders have bet on tax cuts, less regulation and more infrastructure spending from Trump and the Republican-controlled Congress to bolster the US economy.

"There are strong expectations on tax cuts in the US markets. On the other hand, the chance of a Fed rate hike in March seems limited, which is also helping shares," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

US Treasury Secretary Steven Mnuchin on Thursday laid out an ambitious schedule to enact tax relief for the middle class and businesses by August, but added the Trump administration was still studying a border tax.

As Trump has promised a "phenomenal" plan by early March to cut business taxes, many investors expect more clarity when he delivers a speech to Congress on Tuesday.

Wednesday's Federal Reserve minutes, which showed that there was less urgency among voting members to raise interest rates, have helped to drive down US Treasuries yield and the dollar.

The 10-year US Treasuries yield hit a two-week low of 2.372 percent.

The dollar slipped to 112.55 yen, also a two-week low, on Thursday and last stood at 112.69 yen.

The euro fetched $1.0584, off Wednesday's six-week low of $1.0494.

Oil prices held firm near the top of their trading ranges, thanks to high compliance among the OPEC countries to curb output.

US crude futures traded at $54.36 per barrel.
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source: news.abs-cbn.com