Fed policymakers gather amid rising geopolitical risks, unclear tariff impact
The U.S. central bank is widely anticipated to leave its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, and repeat that it can't give much guidance until it is clearer whether President Donald Trump's import tariffs and fiscal policies push inflation higher, undercut growth, or - as his administration contends will happen - keep growth on track while prices ease. Trump has demanded immediate rate cuts. Several days of intense missile exchanges between Israel and Iran, however, presented the Fed with even more reason for caution after oil prices jumped and presented a possible new source of inflation, though crude oil indices were declining along with U.S. bond yields on Monday after reports that the Iranian government was seeking talks with the U.S. and Israel to end the conflict. Major U.S. equity indices rose. Still, the fighting highlighted the uncertainty Fed officials say has gripped their policy debate since Trump returned to power in January and unveiled a far more aggressive effort than expected to raise import taxes and rewrite global trade rules. Fed officials have largely expected that Trump's trade policies will have a stagflationary effect on the U.S. economy, simultaneously slowing growth and raising prices, with the monetary policy path - whether rate cuts or an extended hold of borrowing costs at the current level - dependent on which problem seems to be more serious.
Retail sales and industrial production data due to be released on Tuesday morning could add weight to the evidence the economy is slowing. Economists polled by Reuters expect retail sales fell 0.7% in May after recent months where households appeared to rush some purchases to avoid coming import levies, while industrial output is forecast to rise just 0.1%. "Consumers likely took a break from spending in May following a strong increase in March and a lackluster April," said Scott Anderson, chief U.S. economist at BMO. He added that he expects industrial production fell slightly over the month due to "trade war uncertainty, rising input prices, and slowing U.S. and global demand." The Fed will issue a new policy statement as well as updated projections for the economy and the benchmark interest rate at 2 p.m. EDT (1800 GMT) on Wednesday, with Fed Chair Jerome Powell scheduled to hold a press conference half an hour later.
FED FORECASTS
The central bank's Summary of Economic Projections may draw more attention than the policy decision itself, as analysts and investors look for evidence of how Fed officials' views of the outlook have changed since their last set of projections in March, before the scope of Trump's tariff plans became clear but also before he delayed some of the stiffest levies in the face of largely negative market reaction. Fed officials in March marked down their expectations for economic growth this year and raised their level of expected inflation, but left unchanged the median outlook for two quarter-percentage-point rate cuts this year. Though that rate outlook matched the one in December, the spread of views in the Fed's "dot plot" chart narrowed, and some analysts anticipate a further hawkish shift in light of the central bank's emphasis on keeping inflation controlled and expectations that Trump's new tariffs still will lead to price increases.
"Trade policy developments have likely led to a significant change in Fed forecasts," towards even slower growth and higher inflation this year than expected as of March, Michael Feroli, chief U.S. economist at JP Morgan, wrote on Friday.
"These stagflationary revisions don't point to a clear direction of the revision to the dots. Even so, we think the dots will revise in a modestly hawkish direction" with only a single rate cut this year.
(Reporting by Howard Schneider; Editing by Paul Simao)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
UAE Moments
4 hours ago
- UAE Moments
Dubai Police Promotes First-Ever Female Brigadier
In a history-making move, Dubai Police have promoted Colonel Samira Abdullah Al Ali to Brigadier, making her the first woman ever to earn this prestigious rank since the force was founded in 1956. It's a major moment for the UAE — and a massive win for women in uniform. Brigadier Al Ali currently heads the Insurance Department at Dubai Police, a field she helped shape from the ground up. She joined the force in 1994, after graduating with a degree in insurance from UAE University and briefly working in the private sector. 'It was a newspaper ad that led me to join the academy,' she recalled. 'During my training, retired Major General Jasim Belramitha learned of my academic and professional background in insurance and invited me to work in that field within Dubai Police, which was still in its infancy at the time.' From humble beginnings in a tiny office with just two colleagues, she built a full-fledged department by 2000. Today, that department oversees every aspect of insurance related to the police force's assets — from vehicles to living property — and remains the only one of its kind across UAE police agencies. Samira also broke barriers in the General Department of Transport and Rescue, leading a team where no woman had worked before. With over 31 years of service, she's racked up an impressive resume: 🔹 392 medals, badges, and certificates of appreciation 🔹 225 development proposals submitted 🔹 A Master's in Business Administration and a Diploma in IT 🔹 Numerous awards for innovation, including the 'SAND' and 'Safe Driving Stars' initiatives 'This promotion is a source of pride for every woman in Dubai Police,' she said. 'It's a testament to the organisation's dedication to granting women equal opportunities to lead and serve their country.' Al Ali also thanked His Highness Sheikh Mohammed bin Rashid Al Maktoum for his consistent support of women's empowerment in the UAE. Off-duty? She's also a mom — her son works in chemical engineering — and credits discipline and commitment for helping her balance it all. 'With faith and effort, everything is possible,' she says — and her story proves it.
Khaleej Times
4 hours ago
- Khaleej Times
Trump, EU chief seek deal in transatlantic tariffs standoff
US President Donald Trump and EU chief Ursula von der Leyen prepared to meet Sunday in Scotland in a push to resolve a months-long transatlantic trade standoff that is going down to the wire. Trump has said he sees a 50-50 chance of reaching a deal with the European Union, having vowed to hit dozens of countries with punitive tariffs unless they hammer out a pact with Washington by August 1. The EU is currently facing the threat of an across-the-board levy of 30 percent from that date. Von der Leyen's European Commission, negotiating on behalf of the EU's member countries, has been pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services. Any deal with the United States will need approval by all 27 member states. EU ambassadors, on a visit to Greenland, were to meet Sunday morning to discuss the latest negotiations -- and again after any accord. Sunday's sit-down between Trump and the EU chief was to take place at 4:30 pm (1530 GMT) in Turnberry, on Scotland's southwestern coast, where Trump owns a luxury golf resort. The 79-year-old American leader said Friday he hoped to strike "the biggest deal of them all" with the EU. "I think we have a good 50-50 chance" of a deal, the president said, citing sticking points on "maybe 20 different things". He praised von der Leyen as "a highly respected woman" -- a far cry from his erstwhile hostility in accusing the EU of existing to "screw" the United States. But late-night EU talks with US Commerce Secretary Howard Lutnick on Saturday to hammer out the final details were "combative at times," The Financial Times reported. As of Saturday evening, there were "still quite a few open questions" -- notably on pharmaceutical sector tariffs, said one EU diplomat. Tariff levels on the auto sector were also crucial for the Europeans -- notably France and Germany -- and the EU has been pushing for a compromise on steel that could allow a certain quota into the United States before tariffs would apply. Baseline 15% According to European diplomats, the deal on the table involves a baseline levy of around 15 percent on EU exports to the United States -- the level secured by Japan -- with carve-outs for critical sectors including aircraft, lumber and spirits excluding wine. The EU would commit to ramp up purchases of US liquefied natural gas, along with a series of investment pledges. Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario. The EU has focused on getting a deal with Washington to avoid sweeping tariffs that would further harm its sluggish economy, with retaliation as a last resort. While 15 percent would be much higher than pre-existing US tariffs on European goods -- at 4.8 percent -- it would mirror the status quo, with companies already facing an additional flat rate of 10 percent. Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target. Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade "bazooka" -- EU legislation designed to counter coercion through trade measures which involves restricting access to its market and public contracts. But such a step would mark a major escalation with Washington. Ratings dropping Trump has embarked since returning to power on a campaign to reshape US trade with the world. But polls suggest the American public is unconvinced, with a recent Gallup survey showing his approval rating at 37 percent -- down 10 points from January. Having promised "90 deals in 90 days," Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines. Early Sunday, ahead of his meeting with Von der Leyen, Trump was out again on the golf course, having spent most of Saturday playing at Turnberry amid tight security. The trip to Scotland has put physical distance between Trump and the scandal around Jeffrey Epstein, the wealthy financier accused of sex trafficking who died in prison in 2019 before facing trial. In his heyday, Epstein was friends with Trump and others in the New York jet-set, but the president is facing backlash from his own MAGA supporters demanding access to the Epstein case files. With the uproar refusing to die down, a headline agreement with the EU -- in addition to bolstering Trump's dealmaker credentials -- could bring a welcome distraction.
Zawya
4 hours ago
- Zawya
Stc Group achieved a net profit of one million riyals, a 13.38% increase for the six-month period compared to the same period last year
Riyadh, Kingdom of Saudi Arabia - stc today announced the company's preliminary financial results for the period ending at 30 June 2025: Revenues for the 6 months period of 2025 reached 38,660 million with an increase of 2.09% as compared to the comparable period last year. Gross Profit for the 6 months period of 2025 reached 18,658 million with an increase of 6.61% as compared to the comparable period last year. Operating Profit for the 6 months period of 2025 reached 7,207 million with an increase of 2.28% as compared to the comparable period last year. Earnings before Interest, Taxes, Zakat, Depreciation and Amortization (EBITDA) for the 6 months period of 2025 reached 12,289 million with an increase of 6.10% as compared to the comparable period last year. Net Profit for the 6 months period of 2025 reached 7,472 million with an increase of 13.38% as compared to the comparable period last year. stc distributes 0.55 per share for the 2nd quarter of 2025, in accordance with the dividends distribution policy approved by General Assembly. Commenting on the results, Eng. Olayan Alwetaid, CEO of stc Group, stated that the Group continued to deliver excellent performance through its commitment to its strategy and success in capitalizing on available opportunities within the ICT sector. He pointed out that the focus on financial discipline and improving the efficiency of capital management were key factors in supporting business stability, enhancing the Group's readiness to adapt to changes, and expanding into future growth avenues with confidence and sustainability. This was reflected in the Group's financial performance, as stc achieved revenue growth of 2.1% during the first six months of the year, and an increase in gross profit by 6.6%, compared to the same period last year. Additionally, the Cost Efficiency Program contributed effectively to enhancing operational and financial efficiency, which positively impacted the company's performance, resulting in EBITDA growth of 6.1% with an increase in EBITDA margin by 3.9% to reach 31.8%, which in turn led to a notable increase in net profit by 13.4%, reaching 7.5 billion. The GCEO also emphasized that the growing demand for the Group's services is a testament to the community's trust in the efficiency of its digital solutions. This was demonstrated by the number of STC Bank customers surpassing three million within a short period since its launch at the beginning of 2025, reflecting the accelerated growth in the adoption of digital banking services and embodying the Group's growing role in developing the financial services sector. Furthermore, the GCEO praised the tremendous efforts made by the Kingdom to provide a safe and comfortable environment for pilgrims and its continuous dedication to facilitating Hajj rituals and enhancing the quality of services provided to pilgrims. He also affirmed stc Group's dedication to contributing to the success of the Hajj season through the deployment of the latest technologies and digital solutions, including advanced AI solutions, which the Group implemented to boost network efficiency within the holy sites. During the season, the Group provided record internet speeds serving more than 1.6 million pilgrims and provided services to 1.49 million stc network users, which led to exceptional results, as stc's network recorded the highest traffic hour in its history in Muzdalifah, with a 64% increase in data usage and a 129% surge in 5G network traffic compared to the previous year. Meanwhile, the user experience index rose by 25%, underscoring the network's ability to support one of the world's most significant mass crowd movements. As part of its efforts to expand coverage and provide high-speed connectivity in both urban and remote areas to bridge the digital divide and ensure the delivery of reliable high-quality communication services, stc's 5G network now covers more than 9,500 sites across the Kingdom. The Group has also continued to enhance its network technically by activating the low-frequency spectrum (600 MHz – N71) recently acquired, becoming the first operator in the region to activate this band commercially. This enables users in peripheral areas to access advanced communication services and high-speed connections, thanks to its superior coverage and penetration capabilities. In addition, stc has adopted the 5G standalone technology, which allows full utilization of advanced 5G features such as reduced latency and customized service quality through network slicing. This marks a pivotal step in enabling many vital sectors and strengthening the Kingdom's position in adopting and developing cutting-edge global technologies. In line with its commitment to maintaining its leadership in the fields of telecommunications and information technology, stc Group signed several strategic agreements over the past period. In the field of cloud computing, the Group signed a partnership agreement with Oracle for a value of more than 2 billion, aimed at accelerating digital transformation across the Kingdom, through the development of advanced AI-powered cloud infrastructure and the provision of sovereign cloud solutions via the Oracle Alloy platform, hosted at center3's data centers. Additionally, stc signed a strategic partnership with Singtel Group to collaborate across several areas, including digital platform integration, developing human capabilities, IoT solutions and expansion of subsea cable systems. These partnerships contribute to strengthening stc's position as a comprehensive digital provider across the region. Finally, stc Group released its sixth Sustainability Report for the year 2024, which showcases the progress made across sustainability, environmental and social responsibility, and governance. The report also highlights the Group's efforts to enhance environmental performance and human capital development through digital innovation and upholding the principles of effective governance and ethical excellence. In recognition of these efforts, stc's ESG rating was upgraded from 'BBB' to 'A' in the latest MSCI ratings, reflecting the Group's commitment to adopting the highest local and international sustainability standards and practices. These initiatives reaffirm the Group's role as a key enabler of the national economy by supporting job creation, business growth, talent and skill enhancement, community well-being and the advancement of digital infrastructure. stc Group remains committed to advancing its sustainability efforts and continuing to maximize its positive impact on society, the environment and the economy by adopting sustainability principles across its various business areas.
