15/09/2025

BIZ & FINANCE MONDAY | SEPT 15, 2025

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US Fed poised for first rate cut of 2025

Fed chairman Jerome Powell over renovation costs at the central bank’s Washington headquarters, the president moved to fire Fed governor Lisa Cook in August over mortgage fraud allegations. Cook, who was appointed under former president Joe Biden and is the first black woman to serve on the Fed’s board of governors, swiftly mounted a legal challenge against her removal. She has managed to remain in place while the lawsuit, which could have implications for similar moves against other Fed officials, plays out. Meanwhile, the early resignation in August of another Fed governor, Adriana Kugler, created a vacancy that Trump has rushed to fill with his chief economic adviser Stephen Miran.

concern about political pressure on the independent central bank. Since the bank’s last reduction in December, it has held interest rates at a range between 4.25% and 4.50% as policymakers monitor the effects of Trump’s sweeping tariffs on inflation. Analysts now broadly expect a 25 basis points rate cut at the end of its two-day meeting on Wednesday, as hiring slows. “What’s interesting is that it’s very clear what the Fed is going to do when they meet,” said Josh Lipsky, chair of international economics at the Atlantic Council. “Yet, despite that, there’s high drama around this meeting,” he added, referring to personnel issues on the rate-setting Federal Open Market Committee (FOMC). While Trump has dropped threats of ousting

Miran chairs the White House Council of Economic Advisers but has drawn criticism from Democratic lawmakers over his plans to take a leave of absence – rather than resign – from the Trump administration if confirmed. A panel has nonetheless advanced his nomination and if confirmed quickly by the Republican-majority Senate, he could join the Fed in its next rate meeting. Come Wednesday, markets will be focused on signals surrounding the Fed’s future pace – and size – of rate cuts, Lipsky said. KPMG chief economist Diane Swonk expects this to mark the “start of an easing cycle that the Fed won’t want to commit to”. Traders will also monitor Powell’s remarks on whether he sees inflation risks abating, particularly as worries over price pressures previously held back rate reductions. “The inflation genie has not quite been put back into the bottle,” said Wells Fargo analysts in a recent note. Data released last Thursday showed that the consumer price index, a key inflation gauge, ticked up to 2.9% in August – its highest pace since the start of the year. “The labour market is in a precarious position, with nearly stagnant job growth, deteriorating worker sentiment and an unemployment rate that has inched above many estimates of full employment,” Wells Fargo noted. “With so little positive momentum in the labour market, recession risks have ticked higher,” the report said. With Miran’s potential arrival, markets will be monitoring how much division there is within the FOMC on whether it should make a 25 basis points rate cut, a 50 basis points reduction, or keep rates unchanged. “That’s not something we’re used to seeing from the Fed,” Lipsky said. “This is a group that votes almost in unison over decades.” Analysts also warn that broader changes to the Fed’s make-up could happen more swiftly than markets expect. Presidents of the 12 regional Fed banks come up for reappointment every five years, meaning the Fed board of governors could replace them – although this has not happened before. “The markets, I think, are underpricing some of the risks to central bank independence and what it would mean for monetary policy going forward,” Lipsky said. – AFP

WASHINGTON: The US Federal Reserve is widely expected to make its first interest rate cut of the year at its policy meeting this week, spurred by a weakening jobs market – but political tension looms over the gathering. The Fed’s likely move would follow a months-long push from President Donald Trump to slash rates, and comes amid growing o Move comes amid growing concern about political pressure on independent central bank

The exterior of the Marriner S. Eccles Federal Reserve Board Building in Washington. – REUTERSPIC

American financial firms pledge £1.25 billion investments in UK LONDON: The British government on Saturday announced over £1.25 billion (RM7.11 billion) in fresh investment from major US financial firms, including PayPal , Bank of America, Citigroup and S&P Global, ahead of a state visit by President Donald Trump. Bank of America will launch its first operation in Northern Ireland, creating up to 1,000 jobs in Belfast. Citigroup plans to invest £1.1 billion across its UK operations, including a further commitment to growing its presence in Northern Ireland. new office in Edinburgh, nearly doubling its local workforce. “These investments reflect the strength of our enduring‘golden corridor’with one of our closest trading partners,” said British Trade Minister Peter Kyle. The government said the deals line up £20 billion in trade between Britain and the US. Also on Saturday, the British embassy in Washington said the countries were planning to sign a technology agreement in the coming days to bolster collaboration between their trillion-dollar tech sectors.

Finance Minister Rachel Reeves said the investments would “kickstart the growth that is essential to putting money in working people’s pockets across every part of the United Kingdom”.

S&P Global will invest over £4 million in Manchester, supporting 200 permanent roles, while BlackRock is expected to allocate £7 billion to the UK market next year and has opened a

The investment is expected to create 1,800 jobs across London, Edinburgh, Belfast and Manchester, and deepen transatlantic financial ties, the Department for Business and Trade said.

Trump is to fly to Britain tomorrow for his second state visit, which is expected to last three days. – Reuters

Boeing defence workers reject deal to end strike NEW YORK: Boeing workers at its St. Louis area defence factories will stay on strike after union members voted last week to reject a new contract offer from the American aviation giant. “Boeing’s modified offer did not include a sufficient signing bonus relative to what other Boeing workers have received,” the union said in a statement, in which it also cited the lack of improvement in other benefits.

plan, including hiring permanent replacement workers, as we maintain support for our customers,” Gillian added in a statement. Boeing announced last week that it was launching a recruitment drive to find“permanent” manufacturing workers to replace the striking employees. The latest strike comes on the heels of a much larger stoppage in Boeing’s commercial aviation business involving some 33,000 workers. In 2024, they halted production at Pacific Northwest factories for more than seven weeks. – AFP

Training System and the MQ-25 unmanned aircraft. The site was originally part of the McDonnell Douglas company, which Boeing acquired in 1997. “We’re disappointed our employees have rejected a five-year offer, including 45% average wage growth,” said Dan Gillian, a senior St. Louis site executive with Boeing. He stressed that the company had adjusted its offer based on feedback, to address workers’ concerns. “We will continue to execute our contingency

IAM is among the biggest unions in North America, representing some 600,000 members in aerospace, defence, transportation, shipbuilding, healthcare, manufacturing and other industries. Products produced at Boeing’s St. Louis operation include the F-15 and F-18 combat aircraft, the T-7 Red Hawk Advanced Pilot

The strike began Aug 4, involving some 3,200 workers in Missouri and Illinois represented by the International Association of Machinists and Aerospace Workers (IAM) District 837. This marks the third time that workers have rejected a company offer, and Boeing said in a statement that no further talks were scheduled for now.