Fed Is Right to Wait on Rates, Says Hoenig
Former Kansas City Fed President Thomas Hoenig says the Federal Reserve is right keep interest rates where they are because there is so much uncertainty and there's plenty of liquidity in the market. He speaks on "Bloomberg Surveillance." (Source: Bloomberg)
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Will the Fed Cut Interest Rates Soon? One Official Thinks So.
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Trump Pledge of Quick China Magnet Flows Has Yet to Materialize
(Bloomberg) -- Almost 10 days since President Donald Trump declared a 'done' trade deal with Beijing, US companies remain largely in the dark on when they'll receive crucial magnets from China — and whether Washington, in turn, will allow a host of other exports to resume. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown While there has been a trickle of required permits, many American firms that need Chinese minerals are still waiting on Beijing's approval for shipments, according to people familiar with the process. China's system is improving but remains cumbersome, they said, contrary to Trump's assurances rare earths would flow 'up front' after a June 11 accord struck in London. The delays are holding an array of American industries hostage to the rocky US-China relationship, as some firms wait for magnets and others face restrictions selling to China. That friction risks derailing a fragile tariff truce clinched by Washington and Beijing in Geneva last month, and triggering fresh rounds of retaliation. Interviews with multiple Western buyers, industry insiders and officials familiar with discussions revealed frustration over vague policies in both countries and lingering confusion about what level of magnet approvals from China would trigger Trump to abandon his tit-for-tat export curbs. 'Even if export approvals accelerate, there are so many unknowns about the licensing regime that it's impossible for companies to have a strong sense of certainty about future supply,' said Christopher Beddor, deputy China research director at Gavekal Research. 'At a minimum, they need to factor in a real possibility that talks could break down again, and exports will be halted.' In response to China's sluggishness on magnets, Trump last month restricted US firms from exporting chip software, jet engines and a key ingredient to make plastic to China until President Xi Jinping restores rare-earth exports. Companies subject to Washington's curbs have halted billions of dollars in planned shipments as they wait for players in unrelated sectors to secure permits from Beijing, which could take weeks or even months to process, given the current pace. Corporate chiefs affected by the export-control spat have sought clarity from the administration on its strategy, according to people familiar with the matter. The Commerce Department — which administers the rules — has offered few details, they added. Oil industry executives have tried to convince Trump officials that blocking exports of ethane — a gas used to make plastics — is contrary to US national security interests, according to people familiar with the deliberations. Business leaders have asked for export restrictions to be removed but that's been unsuccessful so far, the people said. Energy and chemical giant INEOS Group Holdings SA has one tanker full of ethane waiting to go, while Enterprise Products Partners has three to four cargo ships stuck in limbo, according to a person familiar with the matter. That's particularly galling because China has adequate ethane supplies in reserve and can switch to using naphtha from the Middle East and other regions for much of their production, the people said. Representatives from the companies did not respond to requests for comment. Industry figures have consistently told the Trump administration the ethane export restrictions are inflicting more pain on US interests than on China, according to the people. China's Ministry of Commerce, which administers export licenses, hasn't responded to Bloomberg's questions on how many for rare earths have been granted since the London talks. At a regular briefing in Beijing on Thursday, spokesperson He Yadong said Beijing was 'accelerating' its process and had given the go-ahead to a 'certain number of compliant applications.' Access to rare earths is an issue 'that is going to continue to metastasize until there is resolution,' said Adam Johnson, chief executive officer of Principal Mineral, which invests in US mineral supply chains for industrial defense. 'This is just a spigot that can be turned on and off by China.' China only agreed to grant licenses — if at all — for six months, before companies need to reapply for approvals. 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Trump's housing director rips the Fed, says the slow pace of rate cuts is fueling America's home-inventory problem
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