SNB says negative interest rates remain an option
"It's not an obvious step to go into negative rates, but I wouldn't say that we don't want to do that if that's necessary," Zanetti told reporters.
"So negative rates are an option but we are aware that the transmission of monetary policy with negative rates is different than in positive territory," he added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
6 hours ago
- Reuters
UK pay awards rise to 3.4% in three months to May, IDR survey shows
LONDON, July 2 (Reuters) - Average annual pay awards offered by British employers rose in the three months to May, after an increase in the minimum wage boosted pay significantly for some lower-paid workers, a survey showed on Wednesday. Incomes Data Research said the median pay settlement awarded by major British employers had increased to 3.4% in the three months to May, up from 3.2% in the three months to the end of April. Median pay awards for private-sector workers increased to 3.5% in the same period, while public-sector pay awards averaged 3.6%. The proportion of private sector employers offering pay settlements of more than 6% jumped to 19% from April's 12%, reflecting higher increases in the services sector. The National Living Wage rose by 9.7% at the start of April to 10.42 pounds ($14.34) an hour. "The National Living Wage has a less direct impact in manufacturing, compared to private services," Zoe Woolacott, a senior researcher at IDR, said. "However, manufacturing employers still face pressures to offer competitive rates of pay in order to recruit and retain staff." The news is could to be a concern for the Bank of England, which is keeping a close watch on inflation pressures in the economy. The BoE, which held interest rates in June, has forecast a slowdown in pay growth this year and expects inflation to peak at 3.7% in September and remain just under 3.5% for the remainder of 2025. Official figures showed British pay growth slowed sharply in the three months to April to 5.2% while inflation cooled in May. IDR's survey, covering pay deals for 3.3 million employees, was based on 178 awards between March 1 and May 31. ($1 = 0.7266 pounds)
NBC News
9 hours ago
- NBC News
Jewelry sales outperform as U.S. spending for most luxury goods falters, Citi report finds
Luxury retail was expected to stage a turnaround in 2025 after a promising fourth quarter marked by holiday shopping and post-election euphoria. Instead, U.S. credit card spending on luxury goods fell during the first five months of the year compared with the same period in 2024, according to data from Citigroup. For the month of May, luxury spending held up better than expected, dipping 1.7% year over year, compared with a 6.8% decline in April and 8.5% in March. Combined spend for the top luxury brands, such as Hermès, even eked out a 0.2% uptick on an annual basis, according to Citi's analysis of a subset of transactions by the bank's 10 million-plus U.S. cardholders. However, these gains aren't equally distributed. Jewelry has proven to be a bright spot, consistently outperforming other categories like leather goods and ready-to-wear. Monthly spend on luxury jewelry has increased on an annual basis each month since September, according to Citi. In May, total luxury jewelry spend surged 10.1% year over year. What's more, while other categories were buoyed by increases in average spend by customer, jewelry was the only product type to also see an increase in individual customers. Within the jewelry category, however, a cohort of high-end brands lost 2.7% of customers, but those who remained spent 11.7% more on average. Citi analyst Thomas Chauvet told CNBC that sales have likely been buoyed by the perception of jewelry as investment pieces. Jewelry can also carry more sentimental value, he said, as a gift or to commemorate a life milestone. 'When you have $3,000 to spend on luxury, you know, are you going to buy a piece of jewelry or a handbag for the same price?' he said. 'Perhaps the piece of jewelry gives you superior intrinsic value given the precious metals content and superior emotional value and meaning.' Chauvet added that the recent run-up in gold prices provides further justification. 'It is probably sensible to buy a Cartier bracelet now, given they have increased prices by less than 5% since the beginning of 2025, when gold prices have appreciated by over 25%,' he said. Handbag brands, on the other hand, have steadily increased prices as much as 30% to 40% since the pandemic without the consumer getting more bang for their buck, he said. 'Handbags have offered limited newness,' Chauvet said, with the caveat that a few fall and winter 2025 collections showed some promise. 'In the last five years, from brand A to brand B, most bags shapes and styles are very difficult to differentiate from one another.' Luxury watch spending has seen some gains this year, but less consistently than that of jewelry. Across all luxury watch brands, spending increased 14.7% compared with May 2024. However, results for the top watch brands fell 10% in May on an annual basis. While surges in Swiss watch exports have made headlines, Chauvet said it was largely driven by retailers stocking up and watch manufacturers rushing product to U.S. subsidiaries in reaction to President Donald Trump 's threatened 31% tariff on Swiss goods. The spending uptick in May may reflect an uplift in consumer sentiment but not necessarily a turning point for high-end shoppers, according to Chauvet. While equity markets have rebounded, the U.S. dollar is down about 10% year to date. 'We know the U.S. consumer feels better about life when the dollar is strong,' he said. 'One example of that in luxury is your ability to travel and to spend abroad on luxury is augmented by a strong dollar.' Other potential threats to consumer spending loom large. The 90-day pause in Trump's so-called reciprocal tariffs is less than two weeks from expiring, and the Iran-Israel conflict has roiled oil prices, Chauvet noted.
The Guardian
11 hours ago
- The Guardian
Federal Reserve chair blames Trump's tariffs for preventing interest rate cuts
The chair of the Federal Reserve, Jerome Powell, has blamed Donald Trump's tariffs for preventing the immediate interest rate cuts the president has demanded. Trump has repeatedly urged Powell to reduce borrowing costs in the US economy. On Tuesday, he said: 'Anybody would be better than J Powell. He's costing us a fortune because he keeps the rate way up.' He spoke not long after Powell told a European Central Bank (ECB) event in Portugal that the Fed was waiting to assess the inflationary impact of the president's trade policies. Speaking on a panel of central bankers in Sintra, the Fed chair said: 'In effect we went on hold when we saw the size of the tariffs. Essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn't overreact, in fact we didn't react at all. We're simply taking some time.' Asked if the Fed would have cut its key Fed funds rate further, from the current target range of 4.25-4.5%, if it wasn't for tariffs, Powell said: 'I think that's right.' Economists generally expect tariffs to be inflationary, as the costs of paying them tend to be passed on to consumers. The effects are highly uncertain, however, as some retailers may be able to absorb some or all of the costs, or switch to alternative suppliers. Powell said: 'We haven't seen effects much from tariffs, and we didn't expect to by now. We've always said the timing, amount and persistence of the inflation would be highly uncertain and it's certainly proved that.' He added: 'We're watching. We expect to see over the summer some higher readings, but we're prepared to learn that it can be higher, or lower, or later or sooner than we'd expected.' Trump has consistently sought to undermine Powell since returning to the White House, peppering him with insults such as, 'major loser' and 'very dumb', and reportedly considering replacing him before his term finishes in May next year. When these personal attacks were raised at the ECB event, the Fed governor received a round of supportive applause from the audience – and from his fellow central bankers on the panel. The US treasury secretary, Scott Bessent, has suggested the Trump administration might take advantage of the opening of a vacant seat on the Fed's board to appoint a potential successor. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion 'There's a seat opening up … in January. So we've given thought to the idea that perhaps that person would go on to become the chair when Jay Powell leaves in May,' he told Bloomberg TV. Speculation that Trump could replace Powell early has been one factor behind the depreciation of the dollar, which has suffered its weakest first-half in more than 50 years. Speaking alongside Powell on Tuesday, the ECB president, Christine Lagarde, suggested it was too soon to declare 'mission accomplished' on inflation in the eurozone; while the Bank of England governor, Andrew Bailey, said there were signs that the jobs market in the UK was slowing.
