Wolfspeed reaches agreement with creditors, plans bankruptcy filing

June 22 (Reuters) - Wolfspeed (WOLF.N), opens new tab said on Sunday that it has reached a restructuring agreement with creditors and plans to file for bankruptcy in the U.S. in the near future.
The restructuring agreement would provide the struggling chipmaker with $275 million in fresh financing by some of its existing creditors, the company said in its statement.

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Reuters

an hour ago

• Reuters

US attack on Iran adds to economic uncertainty

June 23(Reuters) - The U.S. bombing of Iran's nuclear sites injected fresh uncertainty into the outlook for inflation and economic activity at the start of a week chock full of new economic data and central banker commentary, including two days of Congressional testimony from Federal Reserve Chair Jerome Powell. The downside of the attacks may be the easiest to see: the potential for a spike in energy prices, a continuation of the hesitancy that has gripped households and businesses and could crimp spending, and the possibility of a response from Iran that materializes well outside the Gulf. With the U.S. economy already expected to slow under pressure from the Trump administration's high import tariffs, a rise in oil prices resulting from the conflict "could provide powerful downward pressure on households' ability to spend... and that could slow GDP even more," Morgan Stanley Chief Economic Strategist Ellen Zentner said on Sunday. There's also the more bullish case, should the attacks pave the way for eventual stability in the region. "Predicting geopolitical developments in the Middle East is a treacherous exercise," analysts at Yardeni Research wrote after the attacks. "However, the Israeli stock market suggests that we may be witnessing a radical transformation of the Middle East now that Iran has been de-nuked." Israel's Tel Aviv main index .TA125, opens new tabwas at an all-time high after the attacks. That said, the U.S. labor market is clearly losing momentum, even as inflation pressures look set to increase. Data due on Thursday for continued jobless claims will factor into the Labor Department's monthly jobs report for June. To date those reports have pointed to a softening but still-solid job market, with the unemployment rate at a relatively low 4.2%, but Fed policymakers keenly watching for signs of deterioration. Data to be published on Friday is expected to show the weakest U.S. consumer spending growth since January. And while it is also expected to show inflation running near the Fed's 2% goal last month, many Fed officials expect tariffs to feed into higher prices in coming months. A sharp rise in energy prices could fan the embers of inflation further. Powell will undoubtedly be pressed on that possibility and for other ramifications of Middle East developments during two days of Congressional testimony, beginning Tuesday at the House Financial Services Committee and continuing on Wednesday at the Senate Banking Committee. Fed officials last week left the policy rate in its current 4.25%-4.50% range, and while policymakers signaled they felt economic conditions would likely warrant a couple of interest-rate cuts later this year, Powell said that forecast comes with little conviction, given all the uncertainty about tariff policy and how the economy will respond. The weekend's U.S.-Iran developments raise new questions about how uncertainty will impact Fed decision-making, wrote Wells Fargo senior economist Sam Bullard. "The markets will be watching for clues as to how the Fed recalibrates the inflationary risks from higher energy prices and tariffs against the disinflationary pressures of slowing growth," he said.

The Independent

2 hours ago

• The Independent

NATO leaders gather Tuesday for what could be a historic summit, or one marred by divisions

U.S. President Donald Trump and his NATO counterparts are due to gather Tuesday for a summit that could unite the world's biggest security organization around a new defense spending pledge or widen divisions among the 32 allies. Just a week ago, things had seemed rosy. NATO Secretary-General Mark Rutte was optimistic the European members and Canada would commit to invest at least as much of their economic growth on defense as the United States does for the first time. Then Spain rejected the new NATO target for each country to spend 5% of its gross domestic product on defense needs, calling it 'unreasonable.' Trump also insists on that figure. The alliance operates on a consensus that requires the backing of all 32 members. The following day, Trump said the U.S. should not have to respect the goal. 'I don't think we should, but I think they should,' he said. Trump lashed out at Prime Minister Pedro Sánchez's government, saying: 'NATO is going to have to deal with Spain. Spain's been a very low payer." He also criticized Canada as 'a low payer.' Spain was the lowest spender in the alliance last year, directing less than 2% of its GDP on defense expenditure, while Canada was spending 1.45%, according to NATO figures. Then Trump ordered the bombing of nuclear installations in Iran. In 2003, the U.S.-led war on Iraq deeply divided NATO, as France and Germany led opposition to the attack, while Britain and Spain joined the coalition. European allies and Canada also want Ukraine to be at the top of the summit agenda, but they are wary that Trump might not want President Volodymyr Zelenskyy to steal the limelight. A short summit, decades of mutual security The two-day summit in The Hague involves an informal dinner Tuesday and one working session Wednesday morning. A very short summit statement has been drafted to ensure the meeting is not derailed by fights over details and wording. Indeed, much about this NATO summit is brief, even though ripples could be felt for years. Founded in 1949, the North Atlantic Treaty Organization was formed by 12 nations to counter the threat to security in Europe posed by the Soviet Union during the Cold War, notably via a strong U.S. presence on the continent. Dealing with Moscow is in its DNA. Keeping the peace outside the Euro-Atlantic area is not. NATO's ranks have grown to 32 countries since the Washington Treaty was signed 75 years ago. Sweden joined last year, worried by an increasingly aggressive Russia. NATO's collective security guarantee — Article 5 of the treaty — underpins its credibility. It's a political commitment by all countries to come to the aid of any member whose sovereignty or territory might be under attack. Trump has suggested he is committed to that pledge, but he has also sowed doubt about his intentions. He has said the U.S. intends to remain a member of the alliance. A civilian runs NATO, but the U.S. and its military hold power The United States is NATO's most powerful member. It spends much more on defense than any other ally and far outweighs its partners in terms of military muscle. Washington has traditionally driven the agenda but has stepped back under Trump. The U.S. nuclear arsenal provides strategic deterrence against would-be adversaries. NATO's day-to-day work is led by Rutte, a former Dutch prime minister. As its top civilian official, he chairs almost weekly meetings of ambassadors in the North Atlantic Council at its Brussels headquarters. He chairs other 'NACs' at ministerial and leader levels. Rutte runs NATO headquarters, trying to foster consensus and to speak on behalf of all members. NATO's military headquarters is based nearby in Mons, Belgium. It is always run by a top U.S. officer. Ukraine's role at the summit is unclear With Trump demanding greater defense spending, it's unclear what role Ukraine will play at the summit. Zelenskyy has been invited, but it's unclear whether he will have a seat at NATO's table, although he may take part in Tuesday's dinner. Russia's war in Ukraine usually dominates such meetings. More broadly, NATO itself is not arming Ukraine. As an organization, it possesses no weapons of any kind. Collectively, it provides only non-lethal support — fuel, combat rations, medical supplies, body armor, and equipment to counter drones or mines. But individually, members do send arms. European allies provided 60% of the military support that Ukraine received in 2024. NATO coordinates those weapons deliveries via a hub on the Polish border and helps organize training for Ukrainian troops. NATO's troop plans A key part of the commitment for allies to defend one another is to deter Russia, or any other adversary, from attacking in the first place. Finland and Sweden joined NATO recently because of this concern. Under NATO's new military plans, 300,000 military personnel would be deployed within 30 days to counter any attack, whether it be on land, at sea, by air or in cyberspace. But experts doubt whether the allies could muster the troop numbers. It's not just about troop and equipment numbers. An adversary would be less likely to challenge NATO if it thought the allies would use the forces it controls. Trump's threats against U.S. allies — including imposing tariffs on them — has weakened that deterrence. The U.S. is carrying the biggest military burden Due to high U.S. defense spending over many years, the American armed forces have more personnel and superior weapons but also significant transportation and logistics assets. Other allies are starting to spend more, though. After years of cuts, NATO members committed to ramp up their national defense budgets in 2014 when Russia illegally annexed Ukraine's Crimean Peninsula. After Russia's full-scale invasion of Ukraine in 2022, the NATO allies agreed to make 2% of GDP the minimum spending level. Last year, 22 countries were expected to hit that target, up from only three a decade ago. In The Hague, the allies were expected to up the ante to 3.5%, plus a further 1.5% for things like improving roads, bridges, ports and airfields or preparing societies to deal with future conflicts. Whether they will now remains an open question.

BBC News

2 hours ago

• BBC News

US asks China to stop Iran from closing Strait of Hormuz

US Secretary of State Marco Rubio has called on China to prevent Iran from closing the Strait of Hormuz, one of the world's most important shipping comments came after Iran's state-run Press TV reported that their parliament had approved a plan to close the Strait but added that the final decision lies with the Supreme National Security Council. Any disruption to the supply of oil would have profound consequences for the global economy. China in particular is the world's largest buyer of Iranian oil and has a close relationship with Tehran. Oil prices have surged following the US' attack, with the price of the benchmark Brent crude reaching its highest level in five months. "I encourage the Chinese government in Beijing to call them (Iran) about that, because they heavily depend on the Straits of Hormuz for their oil," said Marco Rubio had said in an interview with Fox News on Sunday. "If they [close the Straits]... it will be economic suicide for them. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours."Around 20% of the world's oil passes through the Strait of Hormuz, with major oil and gas producers in the Middle East using the waterway to transport energy from the region. Any attempt to disrupt operations in the Strait could could send global oil prices skyrocketing. They jumped to their highest since January, with the price of Brent crude reaching $78.89 a barrel as of 23:22 GMT Sunday. "The US is now positioned with an overwhelming defence posture in the region to be prepared for any Iran counter attacks. But the risk for oil prices is the situation could escalate severely further," said Saul Kavonic, Head of Energy Research at MST Financial. The cost of crude oil affects everything from how much it costs to fill up your car to the price of food at the in particular buys more oil from Iran than any other nation - with its oil imports from Iran surpassing 1.8 million barrels per day last month, according to data by ship tracking firm analyst Vandana Hari has said Iran has "little to gain and too much to lose" from closing the Strait. "Iran risks turning its oil and gas producing neighbours in the Gulf into enemies and invoking the ire of its key market China by disrupting traffic in the Strait", Hari told BBC News. The US joined the conflict between Iran and Israel over the weekend, with President Donald Trump saying Washington had "obliterated" Tehran's key nuclear sites. However, it's not clear how much damage the strikes inflicted, with the UN's nuclear watchdog saying it was unable to assess the damage at the heavily fortified Fordo underground nuclear site. Iran has said there was only minor damage to Fordo. Trump also warned Iran that they would face "far worse" future attacks if they did not abandon their nuclear Monday, Beijing said the US' attack had damaged Washington's credibility and called for an immediate UN Ambassador Fu Cong said all parties should restrain "the impulse of force... and adding fuel to the fire", according to a state-run CCTV report. In an editorial, Beijing's state newspaper Global Times also said US involvement in Iran "had further complicated and destabilized the Middle East situation" and that it was pushing the conflict to an "uncontrollable state".