Connect with us

Business

Fed’s Hawkish Stance Sparks Market Sell-Off

Published

on

Wall Street experienced a sharp decline as Federal Reserve Chair Jerome Powell adopted a hawkish tone during the December Federal Open Market Committee (FOMC) meeting. The dollar surged to a two-year high, Treasury yields spiked, and Bitcoin tumbled following Powell’s warning of inflation risks and cautious approach to future rate cuts.

The FOMC, as expected, announced a 25-basis-point rate cut, bringing the target range to 4.25%-4.50%. However, the updated economic projections dampened investor sentiment, indicating only two rate cuts in 2025, a significant shift from the four cuts projected in September.

Powell Signals “New Phase” for Monetary Policy

In a press conference, Powell highlighted the Fed’s cautious stance moving forward. “From here, it’s a new phase, and we’re going to be cautious about further cuts,” he said, adding that interest rates are nearing neutral levels—neither stimulating nor restricting economic growth.

While emphasizing the resilience of the U.S. economy, Powell downplayed recession risks. “Most forecasters have been predicting a slowdown in growth for a very long time, and it keeps not happening,” he stated.

Fresh inflation projections fueled the Fed’s recalibrated stance. Headline inflation for 2025 is now expected to hit 2.5%, up from 2.1%, while core inflation is also forecasted at 2.5%, up from 2.2%. Powell reiterated the Fed’s commitment to achieving its 2% inflation target, though he acknowledged it could take “another year or two.”

Market Reaction: Stocks Plunge, Dollar and Yields Surge

The Fed’s stance triggered a broad market sell-off. The S&P 500 fell 3.03% to 5,866.80, the Nasdaq 100 sank 3.74%, and the Dow Jones dropped 1,103 points (-2.54%). Tesla Inc. led the tech sector’s decline, plummeting 8.1%. The CBOE Volatility Index, a measure of market fear, spiked nearly 60%, reflecting heightened investor anxiety.

See also  UAE Mobile Sector Set for Solid Growth as 5G Adoption Accelerates

The dollar index (DXY) climbed 1.22% to 108.265, its highest level in two years, while the euro slid 1.33% to $1.03518, its weakest point since November 2022. Commodities were not spared, with gold dropping 2.3% to $2,584 and silver tumbling 3.9% to a five-week low. Treasury yields surged as investors reassessed rate-cut expectations, with the 10-year yield rising 12 basis points to 4.52%, the highest since late May.

Bitcoin Falls as Powell Rejects Crypto Reserve Tool

Cryptocurrency markets faced additional pressure as Powell dismissed the idea of a U.S. government-backed Bitcoin reserve. “We’re not allowed to own Bitcoin,” Powell clarified, citing legal constraints. Bitcoin fell over 5%, dropping to approximately $100,000, further straining the market.

As the Fed signaled a cautious path forward, concerns over restrictive monetary policy, inflation, and broader economic challenges have fueled investor unease, setting the stage for continued market volatility.

 

Business

Fitch Cuts France’s Debt Outlook to Negative Amid Budget Deadlock and Weak Growth

Published

on

Credit rating agency Fitch has revised France’s sovereign debt outlook from stable to negative while maintaining its rating at A+, citing weaker economic growth, rising borrowing costs and concerns over the country’s ability to reduce its public deficit.

The decision increases pressure on the French government to secure approval for its 2027 budget by the end of the year, as political divisions and an approaching presidential election complicate efforts to restore public finances.

Fitch’s announcement on Friday followed figures from the national statistics institute Insee showing that France’s gross domestic product contracted by 0.1% in the third quarter of 2026. The economy had stagnated in the second quarter after shrinking by 0.2% in the first three months of the year.

The agency pointed to persistent political fragmentation and a difficult social climate, including mass protests, as factors weakening confidence in the government’s ability to deliver lasting fiscal improvements.

Economy and Finance Minister Roland Lescure said he took note of Fitch’s decision, describing the adoption of a responsible budget before the end of the year as an absolute necessity.

The government aims to reduce the budget deficit to 5% of gross domestic product, while maintaining a path towards fiscal consolidation. Lescure said a clear budget was needed to give businesses and investors greater certainty in an uncertain international environment.

Earlier on Friday, he described the French economy as being at a standstill and warned that the country could face serious difficulties if the proposed recovery budget was not adopted. He repeated that the deficit needed to be brought down to 5% or less.

See also  Scandinavian Airlines Looks to AI and Consolidation for Growth Amid Industry Challenges

However, securing parliamentary approval remains uncertain because President Emmanuel Macron’s government lacks a majority in the National Assembly. The approaching 2027 presidential election is also adding to political tensions.

Fitch expects the budget to be adopted despite the parliamentary deadlock, pointing to constitutional procedures available to the government. The agency said political debates ahead of the election had done little to strengthen its confidence in France’s ability to achieve a lasting reduction in the deficit and stabilise public debt.

One option available to the government is Article 49.3 of the French Constitution, which allows legislation to pass without a parliamentary vote unless lawmakers approve a motion of no confidence.

The government could also consider adopting the budget through ordinances, although this procedure has never been used to pass a national budget since the Fifth Republic was established in 1958.

Jérôme Mathis, an economics professor at Paris-Dauphine University, told Euronews that using ordinances could reduce uncertainty in the short term. However, he warned that such a move would not necessarily restore France’s long-term fiscal credibility.

The negative outlook signals increased concern over France’s financial position, although its A+ rating remains unchanged. The government’s ability to pass the 2027 budget and demonstrate credible deficit-reduction measures will be central to restoring confidence.

Continue Reading

Business

Uzbekistan Launches Apple Pay and Google Pay Following Financial Sector Reforms

Published

on

Uzbekistan has introduced Apple Pay and Google Pay, opening access to two major international digital payment platforms as the country moves to modernise its financial services sector.

The rollout follows regulatory changes to personal data laws and discussions between Uzbek officials and technology companies. The Central Bank of Uzbekistan has also confirmed that work is underway to extend the services to cards issued through domestic payment networks Uzcard and HUMO, although no launch date has been announced.

Saida Mirziyoyeva, head of the Presidential Administration, announced the availability of the services for locally issued cards on October 27. She had met Google Vice President Karan Bhatia in New York a month earlier to discuss technological cooperation and the conditions needed for international payment providers to operate in the country.

Banks included in the rollout

Before the launch, customers in Uzbekistan could use domestic mobile and contactless payment services, including HUMO Pay and UZCARD PAY, as well as QR code systems.

The introduction of Apple Pay and Google Pay gives eligible cardholders access to international platforms for mobile payments.

Apple Pay initially supports Visa and Mastercard cards issued by eight local banks and financial institutions: Uzum Bank, Orient Finans Bank, the National Bank of Uzbekistan, Kapitalbank, Hamkorbank, Ipak Yuli Bank, TBC Bank and Octobank. Uzum Bank and Hamkorbank currently support Visa cards only.

Google Pay is available for eligible cards from nine banks: AVO Bank, Octobank, Uzum Bank, TBC Bank, Aloqabank, Kapitalbank, Ipak Yuli Bank, the National Bank of Uzbekistan and Orient Finans Bank.

See also  September Slump Looms Over European Stocks as History Points to Losses

Customers have been advised to contact their banks to confirm which cards can be added to the services.

The Central Bank told Euronews that both platforms protect customers’ card information during transactions. Cashback offers and other benefits will depend on the conditions set by individual banks.

Changes to data protection rules

The launch follows amendments to Uzbekistan’s personal data legislation in March 2026, which eased restrictions on the processing and storage of certain types of personal information outside the country.

During her September meeting with Google’s Bhatia, Mirziyoyeva linked the regulatory changes to the arrival of international payment systems, saying they were creating wider opportunities for their use in Uzbekistan.

The discussions also covered cooperation in artificial intelligence, cybersecurity training and support for the country’s technology industry.

The development forms part of Uzbekistan’s broader efforts to strengthen its financial technology sector. In September, the Central Bank approved a National Fintech Strategy covering the 2026-2030 period.

The strategy aims to attract investment, expand cross-border payments, introduce Open Banking and improve connections between financial systems.

The planned inclusion of Uzcard and HUMO would extend access to the international payment platforms beyond customers using Visa and Mastercard, bringing more locally issued cards into the expanding digital payments market.

Continue Reading

Business

AstraZeneca Third-Quarter Profit Jumps 23% as Drugmaker Plans $1.5 Billion in Annual Savings

Published

on

AstraZeneca reported a 23 per cent increase in third-quarter net profit, supported by strong sales of its cancer medicines, as the British pharmaceutical company announced plans to save $1.5 billion annuAstraZeneca Third-Quarter Profit Jumps 23% as Drugmaker Plans $1.5 Billion in Annual Savings

ally and reinvest the funds in developing new treatments.

The company said on Friday that profit after tax reached $3.12 billion for the July to September period, compared with the same quarter a year earlier. The increase marked a stronger performance than the previous quarter, when net profit rose just over 2 per cent.

Revenue increased 7 per cent to $16.2 billion, while core earnings per share rose 17 per cent to $2.79. The earnings figure excludes certain items, including restructuring costs and the amortisation of acquired medicines.

Oncology remained AstraZeneca’s largest business, accounting for 48 per cent of total revenue. Sales in the division increased 17 per cent to $7.8 billion, supported by demand for lung cancer treatment Tagrisso and immunotherapy Imfinzi.

The company’s new cost-saving programme, named Reshaping for Sustainable Growth, is expected to generate $1.5 billion in annual savings. AstraZeneca said the funds would mainly support its research and development pipeline, which includes more than 180 projects.

The restructuring is expected to involve one-off charges of up to $2 billion and is scheduled to be largely completed by the end of 2029. The company did not announce any job cuts, although the changes could affect its workforce as resources are redirected across the business.

Chief Executive Pascal Soriot said AstraZeneca remained on course to achieve its long-term growth ambitions, pointing to late-stage drug candidates and the expansion of new technologies.

See also  CVC Capital Partners Reportedly Seeking Buyer for Majority Stake in Genetic Group

Pressure from generic medicines and China

The company’s growth came despite declining sales of some established medicines. Revenue from Farxiga, used to treat diabetes, heart and kidney disease, fell 25 per cent to $1.6 billion after generic alternatives entered the US market. Blood thinner Brilinta has also faced competition following the loss of patent protection.

AstraZeneca is also dealing with China’s volume-based procurement system, under which state purchasing programmes secure large orders from pharmaceutical companies in exchange for lower prices.

The drugmaker maintained its 2026 financial outlook, forecasting revenue growth in the mid-to-high single digits and an increase in core earnings per share in the low double digits, excluding currency movements.

It also reaffirmed its ambition to generate $80 billion in annual revenue by 2030, compared with nearly $59 billion in 2025. The company expects the US market to account for half of that target.

AstraZeneca has expanded its focus on the US, adding a direct share listing in New York in February, while also pledging to invest $15 billion in China by 2030.

The company said it had recorded 12 positive late-stage clinical trial results so far this year. Its development programme also includes a weight-loss treatment intended to compete with products such as Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro.

AstraZeneca shares rose more than 4.5 per cent in early trading on Friday following the results.

Continue Reading

Trending