Latest news with #RSM
Hindustan Times
24-06-2025
- Business
- Hindustan Times
U.S. Attack on Iran Injects Uncertainty Into an Already Uncertain Economy
Gasoline prices could be affected depending how the oil market reacts. The U.S. bombing of Iran and direct involvement in Israel's conflict has added a fresh dose of uncertainty to a U.S. economic picture that was already looking pretty muddled. Recent gyrations in policy and global events have left economists and consumers in a state of confusion. On Monday night, just hours after Iran's retaliatory strike on a U.S. base and while talk of regime change was still in the air, President Trump announced a cease-fire deal between Iran and Israel. Add the geopolitical whipsaw to Trump's on-again/off-again tariff plan and to deportations that sparked mass protests and spooked the hotel and agriculture industries. Businesses have slowed hiring considerably, partly out of concern about tariffs and rising costs, but they aren't engaging in big layoffs and the unemployment rate remains low. Even the Federal Reserve, the steward of the U.S. economy, is torn on where things are headed and whether to cut interest rates. 'If you were to ask me, give me a description of the United States economy, it's 'pervasive uncertainty,'' said Joe Brusuelas, chief economist at RSM, an audit, tax and consulting firm. 'There is too much risk on the table right now. We just don't know in which direction we are truly headed.' Nick Bloom, an economics professor at Stanford, oversees an index that tracks economic uncertainty in the U.S. and globally, based on the number of news articles expressing the sentiment. Readings in recent months have soared, hitting quadruple the long-running average, he said. 'The Iranian conflict will fit exactly in this, this kind of deluge,' Bloom said. 'Every theater of economics and politics seems to be impacted by political and economic uncertainty.' The danger of that is if it hampers investment and hiring, he said. 'If you are running a business or you are thinking about going out and buying a car or buying some new clothes, if you are uncertain about the future, you pause,' he said. Economists said they were encouraged by the conflict's muted impact so far on oil prices. U.S. benchmark crude started climbing after Israel began bombing Iran on June 13 but has turned down, falling 7% Monday to $68.51 a barrel. Tankers are seen at the Khor Fakkan Container Terminal in Sharjah, United Arab Emirates. Despite threats, Iran hasn't blocked tanker traffic in the Strait of Hormuz, through which about 20% of the world's oil supply flows, according to the U.S. Energy Information Administration. A conflict that did cause oil prices to surge would risk igniting another round of inflation at a delicate time for the U.S. economy. A 10% rise in oil prices would cause the core components of the Federal Reserve's preferred inflation gauge, the personal-consumption-expenditures index, to rise by 0.04 percentage points, according to analysis by Goldman Sachs. The bank also estimates that a $10 per barrel increase in oil prices would lower U.S. GDP growth by 0.1 percentage points, after balancing the drag on consumption against the economic boost from investment in the energy sector. Trump has badgered the Federal Reserve to cut interest rates, arguing that the Fed is needlessly inflating federal borrowing costs. Any new hints of inflation heating up again could make it harder for the Fed to justify a rate cut in the months to come. On Monday, Trump cautioned against hikes in oil prices. 'Everyone, keep oil prices down,' he wrote on social media. 'I'm watching. You're playing right into the hands of the enemy.' The U.S. economy isn't as vulnerable to Middle Eastern conflict as it was during the Arab oil embargo of the 1970s. The shale-oil boom of the last 15 years has turned the United States into the world's biggest oil producer, which means that some parts of the country even benefit when prices rise. Canada, Brazil, Guyana and others have also risen as more prominent producers. 'There has been a slow but consistent shift over time in the locus of oil production in the global economy that has really changed the historic association between dynamics in the Middle East and the oil price,' said Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics. Higher global demand for renewable energy and weaker economic growth in China should also act as a brake on oil prices, he added. Still, the potential for escalation in the conflict with Iran adds uncertainty to an economic outlook that was already confusing many economists and consumers. As of late last year the Federal Reserve appeared to be close to finally taming inflation after a more than two year fight, a glide path that Trump disrupted with a flurry of import tariffs as soon as he took office. Most economists expect tariffs to lift prices over the coming months, causing new handwringing at the Fed about how quickly to cut rates. The timing for rate cuts 'could come quickly. It could not come quickly,' Chair Jerome Powell said last week. 'We feel like we're going to learn a great deal more over the summer on tariffs.' Rate projections released last week revealed a widening divergence among the 19 Fed policymakers who gather roughly every six weeks to set rates. While 10 of them penciled in at least two rate cuts this year, the number of officials who think the Fed won't cut at all this year rose to seven, from four in March. Write to Jeanne Whalen at
RNZ News
22-06-2025
- Business
- RNZ News
Economies face a potential war shock: Surging oil prices
By Auzinea Bacon , CNN In this 2018 photo, an oil tanker is being loaded at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia. Photo: Ahmed Jadallah/Reuters/File via CNN Newsource The American economy faces the unwelcome prospect of reignited inflation after the United States launched strikes on three nuclear facilities in Iran . High oil and gas prices are a near certainty, experts say. The big question now: How long will the fossil fuels price spike last? Oil prices are expected to rise by about $5 per barrel when markets open on Sunday night (US Time), according to experts. "We are looking at $80 oil on the open," Andy Lipow of Lipow Oil Associates said. US oil hasn't closed above $80 a barrel since January and has largely hovered between $60 and $75 a barrel since August 2024. Relatively tame oil prices have lowered gas prices to below $3 a gallon in many parts of the country, a major source of price relief for inflation-weary consumers. It's unclear if any major spike in oil prices will be sustained for a long period. Oil prices have risen about 10 percent since Israel's surprise attack on June 13 and then fell on Friday after US President Donald Trump announced a two-week deadline on whether to strike Iran. "One shouldn't necessarily assume that just because the price of oil goes up, it's going to stay there. It doesn't," chief economist for the accounting firm RSM Joe Brusuelas said. The direction oil prices take is likely to depend on whether Iran's parliament decides to block the Strait of Hormuz, a key trade route that accounts for about 20 percent of the world's crude oil. On Sunday (US Time), Iran's Foreign Minister Abbas Araghchi said his country has "a variety of options" when deciding how to respond to the US attacks and a prominent adviser to Iran's supreme leader has already called for the closure of the Strait of Hormuz. President of consulting firm Rapidan Energy Group and former energy adviser to President George W. Bush, Bob McNally, said that should Iran cut off the world's oil supply by closing the strait, it would risk more military force from the United States and its allies. Iran could also attack infrastructure in the Persian Gulf that treats and exports oil and gas. "It's possible they will decide the only thing that can dissuade President Trump is the fear of an oil price spike," he said. "They have to actually create that fear." Appearing on Fox News, Secretary of State Marco Rubio called on China to prevent Iran from closing the Strait of Hormuz, adding that closing it would do more damage to other economies than the US economy. China buys a third of all oil that comes from the Persian Gulf, while the United States buys less than 3 percent. "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil," Rubio said. Meanwhile, American consumers may soon feel a price shock at the pump. "It takes five days or so for stations to pass along the prices they see in one day. If oil markets do surge today and then tomorrow, it could start showing up at the pump in a matter of hours," vice president of petroleum analysis at GasBuddy - a fuel tracking platform - Patrick De Haan said. According to Lipow, should the Strait of Hormuz be affected, the price of oil could rise to $100 a barrel, which would raise gas and diesel prices by about 75 cents per gallon from recent levels. Meanwhile, US trade policies combined with the war with Iran "strongly suggest inflation will be moving faster and higher over the next 90 days," according to Brusuelas. Many mainstream economists argue that the low inflation of the spring represents a calm before the summer storm, when they expect prices to rise because of Trump's tariffs. - CNN
Telegraph
22-06-2025
- Business
- Telegraph
Raising capital gains tax again will backfire, Reeves warned
Another capital gains tax raid in the next Budget would 'backfire' on Rachel Reeves and cost the Treasury money, experts have warned. The Chancellor is under pressure to launch a fresh round of tax hikes after raising the top rate of capital gains by four percentage points last year. However, if capital gains rates rise again, anyone selling assets for a profit may choose to delay crystallising their gains or find ways around the tax, which would lead to a loss of revenue for the Exchequer. Tax advisers have warned that a large proportion of capital gains revenues derive from a small number of taxpayers, meaning a significant increase in the rate could 'distort their behaviour', and reduce tax receipts. HMRC estimates suggest that just 2,000 individuals with gains of £5m or more accounted for 37pc of the capital gains subject to tax in 2022-23. Chris Etherington, of accountancy firm RSM, said: 'Given that a significant amount of annual capital gains derive from such a small tranche of the population, it is far from guaranteed that a significant increase in the rate would translate to a windfall of additional tax receipts. 'The Chancellor will no doubt be mindful of the potential risks presented by a further capital gains tax rate rise and may be wary of tax policy changes that could backfire.' In last year's October Budget, Ms Reeves raised the main rates of capital gains tax from 10pc to 18pc for basic rate taxpayers, and from 20pc to 24pc for higher rate taxpayers. She also stripped back relief offered to those selling companies or shares. In March, the Office for Budget Responsibility, the fiscal watchdog, warned that the decision would leave a £23bn hole in the public purse as investors hold off from crystallising gains. Speculation mounted in the lead-up to the Budget that capital gains would be aligned much more closely with income tax, with rates as high as 39pc being modelled by Treasury officials. Households are bracing for a slew of tax rises after the Office for Budget Responsibility (OBR) halved the country's growth forecast for this year to 1pc. Low growth and high borrowing costs could force Ms Reeves to raise taxes again in what the Institute for Fiscal Studies think tank has warned could be a 'blockbuster Budget'. Capital gains tax receipts fell to £13bn in the year to March 2025, down 10pc from £14.5bn in the same period last year, according to HM Revenue & Customs data. The tax accounts for less than 2pc of all government revenue. Nimesh Shah, of accountancy firm Blick Rothenberg, said: 'Capital gains tax revenue comes from a narrow pool of people, so it doesn't take much for that distortion to make an impact – a small change can make a big difference. 'It's an optional tax. You only pay when you dispose of an asset, so people may simply choose to hold on to things like houses, so as not to crystallise the tax bill – or they may simply leave the UK and crystallise the gains abroad. 'Like all taxes, there's a Laffer Curve point with capital gains tax where revenue starts to fall as rates rise.'
Business Standard
20-06-2025
- Business
- Business Standard
Sai Life Sciences rises on completion of second phase expansion at Bidar facility
Sai Life Sciences rose 1.82% to Rs 742.45 after the company announced the successful commencement of commercial operations for the second phase of the production block at its Unit IV facility in Bidar, Karnataka. The new phase, which became operational on 19 June 2025, adds approximately 91 kL of production capacity. This marks the second and final phase of the total planned capacity addition of approximately 195 kL at the facility, as disclosed in the companys prospectus. With this addition, the total installed capacity at Unit IV now stands at approximately 640 kL. The expanded facility is equipped to manufacture Registered Starting Materials (RSM), intermediates, and Active Pharmaceutical Ingredients (APIs) for both clinical and commercial applications. Hyderabad-based Sai Life Sciences is a leading global contract research, development, and manufacturing organization (CRDMO) that partners with innovator pharmaceutical and biotech companies to accelerate the discovery, development, and commercialization of new medicines. The company offers integrated solutions spanning medicinal chemistry, process development, clinical and commercial manufacturing, and advanced technology platforms. The company's net profit surged 105% to Rs 170 crore on a 16% increase in revenue from operations to Rs 1,695 crore in Q4 March 2025 over Q4 March 2024.
Yahoo
16-06-2025
- Business
- Yahoo
Commentary: Inflation isn't gone. It's just dormant.
If anyone other than Donald Trump were president, inflation would be yesterday's problem. Since peaking at 9% in 2022, the overall inflation rate has declined steadily, hitting a tame 2.4% in May. That's almost at the 2% level the Federal Reserve considers ideal. Goods inflation has disappeared. The last time it was above 1% was September 2023. The cost of appliances, clothing, and electronics is actually declining on a year-over-year basis. Gasoline prices are 12% lower than a year ago. Services inflation is a bit elevated at 3.7%, but this has also been dropping for more than two years. Part of services inflation is the rising cost of labor, which is good for workers. Under normal circumstances, consumers should be enjoying some newfound purchasing power, given that incomes are now growing more than prices. The Federal Reserve should be poised to restart a cycle of gradual interest rate cuts, which it halted last December, lowering borrowing costs for everybody. But inflation isn't licked. It's just dormant. Trump's tariffs on imports are bound to have some inflationary effect, beginning any day now. Trump has raised the average tax on imports from 2.5% to about 16%. That will inevitably raise the cost of some $3 trillion worth of goods Americans buy every year. Economists thought the May inflation data would start to show signs of upward price pressure from Trump's import taxes. Not quite yet. "The April Consumer Price Index is welcome news," Oxford Economics reported on June 11. "However, the boost from tariffs will be more noticeable this summer."What's hard to gauge, for now, is the amount of product inventory retailers have in stock from pre-tariff import orders. Imports surged in the first quarter as American firms stocked up, knowing the Trump tariffs were coming. Then, in April, imports plunged after Trump announced sky-high tariffs. Trump lowered some of those tariffs after financial markets tanked, but trade data for May isn't out yet. So it's not clear just how long the pre-tariff inventories will hold out. Read more: How to protect your money during turmoil, stock market volatility Some economists think signs of tariff pricing are beginning to form. Joe Brusuelas, chief economist at RSM, detects an "emerging sketch" of rising prices caused by tariffs. "Tariff sensitive goods like apparel, electronics and toys are up 0.4% since the beginning of the year and consumer electronics are up 0.5% over that same period," he wrote in a June 11 analysis. Those are small month-to-month changes shoppers might not notice — yet — but they represent a reversal of deflationary trends that were in place before Trump took office. "The price increases will be passed along," Brusuelas said. Most economists expect overall inflation to rise in the coming months. "Tariff-induced inflation will start showing up in the coming months," Moody's Analytics said in its June 11 analysis of the May inflation numbers. Goldman Sachs expects inflation to rise from 2.4% now to around 3.7% by the end of the year. Will shoppers notice? After three years of elevated prices, consumers seem unusually sensitive to any price hikes. And survey data shows they're girding for higher prices caused by Trump's tariffs. The current reprieve is certainly welcome, but it's too early to celebrate inflation's demise. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
