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In a bold and unexpected move, the Reserve Bank of India (RBI) slashed the repo rate by 50 basis points (bps) to 5.50% on June 6, offering relief to millions of borrowers across the country. This is the third rate cut in a row, bringing the total reduction to 100 bps.&nbsp;The decision, announced after the RBI’s three-day Monetary Policy Committee (MPC) meeting, exceeded market expectations of a modest 25 bps cut.&nbsp;Alongside the repo rate reduction, the RBI also plans to lower the cash reserve ratio (CRR) by 100 bps on four tranches over the year, from 4 per cent to 3 per cent, freeing up an estimated ₹2.5 lakh crore (nearly $29 billion) in liquidity. This double-pronged move is aimed at stimulating lending, boosting economic activity, and lowering borrowing costs for both individuals and businesses.<h2>What is the repo rate, and why does it matter?</h2>The repo rate is the rate at which the RBI lends money to commercial banks. A lower repo rate means banks can borrow funds more cheaply. This, in turn, usually leads banks to reduce interest rates on loans to customers—impacting everything from home loans to auto and personal loans.&nbsp;Retail floating-rate loans issued after October 2019 are linked to external benchmarks, usually the repo rate, which means that EMIs (equated monthly instalments) adjust according to changes in the repo rate.&nbsp;Domestic banks typically pass on these rate cuts to borrowers either fully or partially, depending on their interest reset cycle, which generally occurs within three to six months.<h2>How much will borrowers save?</h2>If banks fully pass on the 50 bps cut, the savings for borrowers could be substantial:&nbsp;Home loan of ₹50 lakh at 8.70 per cent for 30 years:Current EMI: ₹39,136Interest rate drops by 50 bps to 8.20 per cent:New EMI: ₹37,346Monthly Savings: ₹1,790Annual Savings: ₹21,480While the monthly savings might not seem like much, over a 30-year term, even small monthly savings add up to lakhs of rupees and bring real long-term financial relief.&nbsp;Now let's say you took a car loan or a personal loan of ₹5 lakh at 12 per cent for 5 years:Current EMI: ₹11,122Interest rate drops by 50 bps to 11.50 per cent:New EMI: ₹10,963Monthly Savings: ₹159Annual Savings: ₹1,908&nbsp;Borrowers can choose to enjoy the lower EMIs or retain their existing payments and shorten the loan tenure, reducing overall interest paid.<h2>Impact on FD Investors</h2>While the move is positive for borrowers, it could hurt bank fixed deposit (FD) investors. As the RBI’s lending rates drop, banks are expected to reduce FD rates across various tenures, leading to lower returns.&nbsp;Financial advisors suggest locking in current FD rates before they decline or considering alternatives like post office small savings schemes.&nbsp;The RBI’s aggressive rate cut comes amid cooling inflation and global uncertainty. It aims to support domestic consumption and revive credit growth. Borrowers are advised to watch how their banks react to the transmission of rate cuts.&nbsp;For those with existing loans or planning to borrow, the current environment presents a golden opportunity to ease financial pressure or invest in big-ticket purchases like homes or vehicles.

A lower repo rate usually leads banks to reduce interest rates on loans to customers—impacting everything from home loans to auto and personal loans.

In a bold and unexpected move, the Reserve Bank of India (RBI) slashed the repo rate by 50 basis points (bps) to 5.50% on June 6, offering relief to millions of borrowers across the country. This is the third rate cut in a row, bringing the total reduction to 100 bps. The decision, announced after the RBI’s three-day Monetary Policy Committee (MPC) meeting, exceeded market expectations of a modest 25 bps cut. Alongside the repo rate reduction, the RBI also plans to lower the cash reserve ratio (CRR) by 100 bps on four tranches over the year, from 4 per cent to 3 per cent, freeing up an estimated ₹2.5 lakh crore (nearly $29 billion) in liquidity. This double-pronged move is aimed at stimulating lending, boosting economic activity, and lowering borrowing costs for both individuals and businesses. What is the repo rate, and why does it matter? The repo rate is the rate at which the RBI lends money to commercial banks. A lower repo rate means banks can borrow funds more cheaply. This, in turn, usually leads banks to reduce interest rates on loans to customers—impacting everything from home loans to auto and personal loans. Retail floating-rate loans issued after October 2019 are linked to external benchmarks, usually the repo rate, which means that EMIs (equated monthly instalments) adjust according to changes in the repo rate. Domestic banks typically pass on these rate cuts to borrowers either fully or partially, depending on their interest reset cycle, which generally occurs within three to six months. How much will borrowers save? If banks fully pass on the 50 bps cut, the savings for borrowers could be substantial: Home loan of ₹50 lakh at 8.70 per cent for 30 years: Current EMI: ₹39,136 Interest rate drops by 50 bps to 8.20 per cent: New EMI: ₹37,346 Monthly Savings: ₹1,790 Annual Savings: ₹21,480 While the monthly savings might not seem like much, over a 30-year term, even small monthly savings add up to lakhs of rupees and bring real long-term financial relief. Now let's say you took a car loan or a personal loan of ₹5 lakh at 12 per cent for 5 years: Current EMI: ₹11,122 Interest rate drops by 50 bps to 11.50 per cent: New EMI: ₹10,963 Monthly Savings: ₹159 Annual Savings: ₹1,908 Borrowers can choose to enjoy the lower EMIs or retain their existing payments and shorten the loan tenure, reducing overall interest paid. Impact on FD Investors While the move is positive for borrowers, it could hurt bank fixed deposit (FD) investors. As the RBI’s lending rates drop, banks are expected to reduce FD rates across various tenures, leading to lower returns. Financial advisors suggest locking in current FD rates before they decline or considering alternatives like post office small savings schemes. The RBI’s aggressive rate cut comes amid cooling inflation and global uncertainty. It aims to support domestic consumption and revive credit growth. Borrowers are advised to watch how their banks react to the transmission of rate cuts. For those with existing loans or planning to borrow, the current environment presents a golden opportunity to ease financial pressure or invest in big-ticket purchases like homes or vehicles.

A lower repo rate usually leads banks to reduce interest rates on loans to customers—impacting everything from home loans to auto and personal loans.

RBI’s repo rate cut: What it means for your loans and FD?

The US job market continued its steady growth in May 2025, with total nonfarm payroll employment increasing by 139,000, according to the latest report from the Bureau of Labor Statistics (BLS). The unemployment rate held steady at 4.2 per cent, a level it has hovered around since May 2024.Hiring was driven by notable gains in health care, leisure and hospitality, and social assistance, while federal government employment continued to shrink. The increase was slightly below the monthly average of 149,000 jobs seen over the past year, signalling a stable but cooling labour market.Health care saw the strongest performance, adding 62,000 jobs. Within the sector, hospitals and outpatient care services led the charge, contributing 30,000 and 29,000 new positions, respectively.The leisure and hospitality industry also showed robust growth, adding 48,000 jobs, with 30,000 of those in food services and drinking establishments. Social assistance roles, particularly in individual and family services, grew by 16,000 jobs.US President Donald Trump’s aggressive protectionist policies, especially his sweeping tariffs on imports, have muddied the outlook for the economy and the job market and raised fears that the American economy could be headed toward recession. But so far the damage hasn’t shown up clearly in government economic data.Economists say Trump’s flip-flopping on import tariffs has hampered businesses’ ability to plan ahead and hire more workers. Opposition to Trump’s tax cut and spending bill from conservative Republicans in the US Senate and tech billionaire Elon Musk has added another layer of uncertainty for companies.<h2>Workforce participation slips</h2>While the headline unemployment rate stayed unchanged, some underlying figures revealed subtle shifts. The number of unemployed people rose slightly to 7.2 million, with a notable increase in those jobless for less than five weeks, suggesting recent layoffs. Meanwhile, the number of long-term unemployed (those out of work for 27 weeks or more) dropped by 218,000 to 1.5 million.However, fewer people were participating in the workforce. The labour force participation rate declined to 62.4 per cent, and the employment-population ratio dipped to 59.7 per cent. These decreases suggest that some individuals may have stopped looking for work or are facing barriers to employment.There was also little change in the number of people working part-time for economic reasons, which remained at 4.6 million. These are individuals who would prefer full-time employment but are unable to find it or had their hours cut.<h2>Federal government jobs drop again</h2>One of the few areas to record a clear decline was the federal government, which lost 22,000 jobs in May. Since January 2025, federal employment has decreased by 59,000. The BLS clarified that employees on paid leave or receiving severance are still counted as employed, so these losses reflect deeper structural reductions.Most other industries, including construction, manufacturing, retail trade, and professional services, showed little or no net change in employment last month.<h2>Wages rise modestly</h2>On the earnings front, average hourly wages for all private-sector employees rose by 15 cents, or 0.4 per cent, to $36.24. Over the past 12 months, wages have grown by 3.9 per cent. Production and non-supervisory employees saw similar wage growth, with average hourly earnings rising to $31.18.President Trump cheered the numbers, posting on his Truth Social platform on June 6, saying, "America is hot! Six months ago it was cold as ice! Border is closed, prices are down. Wages are up!"The average workweek remained steady at 34.3 hours, unchanged for the third consecutive month.While job growth continues, recent revisions to prior months’ data show the economy added fewer jobs than originally reported. March’s job gains were revised down by 65,000 to 120,000, and April’s by 30,000 to 147,000, bringing the combined downward revision to 95,000.NBC News reported that analysts with ManpowerGroup said in a note that the report points to “a labour market that is steady but cautious in the face of ongoing uncertainty”.

Hiring was driven by notable gains in health care, leisure and hospitality, and social assistance, while federal government employment continued to shrink. 

The US job market continued its steady growth in May 2025, with total nonfarm payroll employment increasing by 139,000, according to the latest report from the Bureau of Labor Statistics (BLS). The unemployment rate held steady at 4.2 per cent, a level it has hovered around since May 2024. Hiring was driven by notable gains in health care, leisure and hospitality, and social assistance, while federal government employment continued to shrink. The increase was slightly below the monthly average of 149,000 jobs seen over the past year, signalling a stable but cooling labour market. Health care saw the strongest performance, adding 62,000 jobs. Within the sector, hospitals and outpatient care services led the charge, contributing 30,000 and 29,000 new positions, respectively. The leisure and hospitality industry also showed robust growth, adding 48,000 jobs, with 30,000 of those in food services and drinking establishments. Social assistance roles, particularly in individual and family services, grew by 16,000 jobs. US President Donald Trump’s aggressive protectionist policies, especially his sweeping tariffs on imports, have muddied the outlook for the economy and the job market and raised fears that the American economy could be headed toward recession. But so far the damage hasn’t shown up clearly in government economic data. Economists say Trump’s flip-flopping on import tariffs has hampered businesses’ ability to plan ahead and hire more workers. Opposition to Trump’s tax cut and spending bill from conservative Republicans in the US Senate and tech billionaire Elon Musk has added another layer of uncertainty for companies. Workforce participation slips While the headline unemployment rate stayed unchanged, some underlying figures revealed subtle shifts. The number of unemployed people rose slightly to 7.2 million, with a notable increase in those jobless for less than five weeks, suggesting recent layoffs. Meanwhile, the number of long-term unemployed (those out of work for 27 weeks or more) dropped by 218,000 to 1.5 million. However, fewer people were participating in the workforce. The labour force participation rate declined to 62.4 per cent, and the employment-population ratio dipped to 59.7 per cent. These decreases suggest that some individuals may have stopped looking for work or are facing barriers to employment. There was also little change in the number of people working part-time for economic reasons, which remained at 4.6 million. These are individuals who would prefer full-time employment but are unable to find it or had their hours cut. Federal government jobs drop again One of the few areas to record a clear decline was the federal government, which lost 22,000 jobs in May. Since January 2025, federal employment has decreased by 59,000. The BLS clarified that employees on paid leave or receiving severance are still counted as employed, so these losses reflect deeper structural reductions. Most other industries, including construction, manufacturing, retail trade, and professional services, showed little or no net change in employment last month. Wages rise modestly On the earnings front, average hourly wages for all private-sector employees rose by 15 cents, or 0.4 per cent, to $36.24. Over the past 12 months, wages have grown by 3.9 per cent. Production and non-supervisory employees saw similar wage growth, with average hourly earnings rising to $31.18. President Trump cheered the numbers, posting on his Truth Social platform on June 6, saying, "America is hot! Six months ago it was cold as ice! Border is closed, prices are down. Wages are up!" The average workweek remained steady at 34.3 hours, unchanged for the third consecutive month. While job growth continues, recent revisions to prior months’ data show the economy added fewer jobs than originally reported. March’s job gains were revised down by 65,000 to 120,000, and April’s by 30,000 to 147,000, bringing the combined downward revision to 95,000. NBC News reported that analysts with ManpowerGroup said in a note that the report points to “a labour market that is steady but cautious in the face of ongoing uncertainty”.

Hiring was driven by notable gains in health care, leisure and hospitality, and social assistance, while federal government employment continued to shrink.&nbsp;

US employment rises moderately in May; unemployment steady at 4.2%

Indian equity markets ended the week on a high note, propelled by the Reserve Bank of India’s (RBI) unexpected move to slash the repo rate by 50 basis points (bps) and the cash reserve ratio (CRR) by 100 bps.The aggressive policy easing reversed two weeks of negative sentiment, sparking a strong rally across sectors. The Nifty surged past the 25,000 mark closing at 25,003.05 after rising 252.15 points, or 1.02 per cent. While the Sensex gained 746.95 points, or 0.92 per cent, to close at 82,188.99, marking one of the strongest weekly performances in recent times.<h2>Rate-sensitive sectors drive gains</h2>The RBI’s policy, coupled with a shift in stance from ‘accommodative’ to ‘neutral’, signalled a decisive pro-growth pivot, igniting optimism among investors.The Nifty Realty index surged 4.68 per cent, emerging as the top-performing sector, as hopes of a housing demand revival gained momentum. Financials followed closely, with the Nifty Bank and Financial Services indices climbing 1.5 per cent and 1.75 per cent, respectively, driven by gains in top lenders and NBFCs. Auto stocks also rallied, contributing to the upbeat sentiment.Market heavyweights HDFC Bank and Bajaj Finance were among the biggest individual contributors to the Nifty’s rally, adding 48 and 25 points, respectively. Axis Bank, M&amp;M, and Shriram Finance also featured prominently among the top gainers.Meanwhile, the broader markets outperformed, with the Nifty Midcap index rising 3 per cent for the week and 1.2 per cent on June 6 alone. The Nifty Smallcap index added 0.8 per cent.<h2>Investors add ₹3.6 lakh crore in a single session</h2>The RBI’s dovish stance had an immediate impact on investor wealth. The market capitalisation of BSE-listed companies jumped by ₹3.6 lakh crore (nearly $42 billion) in Friday’s session alone, pushing total market cap to ₹451.1 lakh crore (almost $5,262 billion).The advance-decline ratio remained robust at 3:2, signalling widespread investor participation. In total, 46 out of the 50 Nifty stocks posted gains during the week, with some surging over 10 per cent.Notably, gold loan financiers like Muthoot Finance saw strong buying interest as the RBI hinted at easing norms for unsecured loans, further lifting sector sentiment.<h2>Markets eye further upside; analysts advise caution</h2>Despite the week’s strong gains, analysts maintain a cautious optimism. The Nifty, while still in a consolidation phase, is now eyeing a breakout above the 25,200 level. A decisive move beyond this could pave the way for a fresh rally towards 25,600. Technical indicators remain supportive, particularly with the Nifty Bank index touching a new 52-week high of 56,584.Volatility also declined, with the India VIX falling over 2 per cent, indicating cooling risk perception. Meanwhile, the RBI’s decision to lower the CPI inflation forecast for FY26 to 3.7 per cent further strengthened the case for an extended easing cycle.Looking ahead, rate-sensitive sectors like financials, realty, and auto are expected to stay in focus. Themes like infrastructure and railways could also benefit from the evolving pro-growth environment.

The aggressive policy easing reversed two weeks of negative sentiment, sparking a strong rally across sectors. The Nifty surged past the 25,000 mark 

Indian equity markets ended the week on a high note, propelled by the Reserve Bank of India’s (RBI) unexpected move to slash the repo rate by 50 basis points (bps) and the cash reserve ratio (CRR) by 100 bps. The aggressive policy easing reversed two weeks of negative sentiment, sparking a strong rally across sectors. The Nifty surged past the 25,000 mark closing at 25,003.05 after rising 252.15 points, or 1.02 per cent. While the Sensex gained 746.95 points, or 0.92 per cent, to close at 82,188.99, marking one of the strongest weekly performances in recent times. Rate-sensitive sectors drive gains The RBI’s policy, coupled with a shift in stance from ‘accommodative’ to ‘neutral’, signalled a decisive pro-growth pivot, igniting optimism among investors. The Nifty Realty index surged 4.68 per cent, emerging as the top-performing sector, as hopes of a housing demand revival gained momentum. Financials followed closely, with the Nifty Bank and Financial Services indices climbing 1.5 per cent and 1.75 per cent, respectively, driven by gains in top lenders and NBFCs. Auto stocks also rallied, contributing to the upbeat sentiment. Market heavyweights HDFC Bank and Bajaj Finance were among the biggest individual contributors to the Nifty’s rally, adding 48 and 25 points, respectively. Axis Bank, M&M, and Shriram Finance also featured prominently among the top gainers. Meanwhile, the broader markets outperformed, with the Nifty Midcap index rising 3 per cent for the week and 1.2 per cent on June 6 alone. The Nifty Smallcap index added 0.8 per cent. Investors add ₹3.6 lakh crore in a single session The RBI’s dovish stance had an immediate impact on investor wealth. The market capitalisation of BSE-listed companies jumped by ₹3.6 lakh crore (nearly $42 billion) in Friday’s session alone, pushing total market cap to ₹451.1 lakh crore (almost $5,262 billion). The advance-decline ratio remained robust at 3:2, signalling widespread investor participation. In total, 46 out of the 50 Nifty stocks posted gains during the week, with some surging over 10 per cent. Notably, gold loan financiers like Muthoot Finance saw strong buying interest as the RBI hinted at easing norms for unsecured loans, further lifting sector sentiment. Markets eye further upside; analysts advise caution Despite the week’s strong gains, analysts maintain a cautious optimism. The Nifty, while still in a consolidation phase, is now eyeing a breakout above the 25,200 level. A decisive move beyond this could pave the way for a fresh rally towards 25,600. Technical indicators remain supportive, particularly with the Nifty Bank index touching a new 52-week high of 56,584. Volatility also declined, with the India VIX falling over 2 per cent, indicating cooling risk perception. Meanwhile, the RBI’s decision to lower the CPI inflation forecast for FY26 to 3.7 per cent further strengthened the case for an extended easing cycle. Looking ahead, rate-sensitive sectors like financials, realty, and auto are expected to stay in focus. Themes like infrastructure and railways could also benefit from the evolving pro-growth environment.

The aggressive policy easing reversed two weeks of negative sentiment, sparking a strong rally across sectors. The Nifty surged past the 25,000 mark.

Indian equity markets ride the RBI rate cut tide to recoup losses

A growing number of American and international companies are slashing jobs in response to President Donald Trump’s sweeping tariffs on global imports. The wave of layoffs, spanning industries from automobiles to consumer goods, is raising red flags about the health of the US labour market and its economic trajectory.Trump’s latest trade policy, rolled out in late March 2025, imposes a 25 per cent tariff on all automobile and auto parts imports, along with days later in April imposing sweeping tariffs on over a dozen trading partners.The Trump administration has framed the move as a national security measure to protect domestic manufacturing. However, the real-world impact is proving far more complex—and costly.The tariffs have increased cost pressure on companies, and while some companies have decided to pass on the additional cost to the consumer, some have resorted to cutting costs by reducing their workforce.<h3>Thousands laid off across sectors</h3>In just the last few weeks, companies have reported mass job cuts and halted production at facilities across North America. Stellantis NV has temporarily laid off 900 workers in the US and halted output at plants in Mexico and Canada, citing medium- and long-term effects of the tariffs.Volvo Group and Mack Trucks, both hit hard by tariff-related cost spikes and falling demand, have announced more than 800 job cuts across Pennsylvania, Virginia, and Maryland. Meanwhile, Swedish fintech company Klarna is slashing 40 per cent of its workforce as it leans into AI to reduce costs.Consumer goods giant Procter &amp; Gamble is planning to cut 7,000 jobs, nearly 6 per cent of its workforce, over the next two years. The company cited uneven demand and increased input costs due to trade disruptions.Some news reports also revealed that the company plans to exit certain product categories and markets. P&amp;G imports several raw materials and packaging components from China, making it particularly vulnerable to tariff-related price volatility.Steelmaker Cleveland-Cliffs laid off over 1,200 workers, while UPS is cutting 20,000 jobs after seeing a sharp reduction in shipments from major clients like Amazon.Even tech giants like Microsoft, Google, and Amazon have announced tens of thousands of role reductions, citing a mix of automation, falling demand, and global cost pressures.Congressman Ro Khanna has criticised the tariff-driven chaos. “This week, 19 factories had mass layoffs, 15 closed, and over 4,100 factory workers lost their jobs,” he posted on X. He also warned that the latest round of protectionist policies could trigger broader economic pain.<h3>Economists sound alarm over recession risk</h3>Wall Street is increasingly concerned. JPMorgan’s chief US economist Michael Feroli has downgraded GDP growth projections from 1.3 per cent to -0.3 per cent for 2025, stating that the economy is now expected to contract under the “weight of the tariffs”.Federal Reserve Chair Jerome Powell has echoed the concern, noting that the tariffs may cause persistent inflation and economic drag—effects that could outweigh their intended industrial benefits.Globally, the International Monetary Fund (IMF) has projected a 2.8 per cent annual decline in global output, including a 1.8 per cent drop for the US, due to the new wave of trade barriers.Meanwhile, European brewers are warning of 100,000 potential job losses if the US follows through with levies on beer imports from the EU and Mexico.While the recent job data released in the US has indicated an uptick in hiring and has offered a glimmer of hope for the US labour market, the concerns about unemployment loom as the data also showed a rise in layoffs.Despite these warnings, Trump and his supporters continue to defend the policy as a step toward reshoring industry and protecting US jobs. But, at least so far, the reality playing out on the ground tells a different story.

The wave of layoffs, spanning industries from automobiles to consumer goods, is raising red flags about the health of the US labour market and its economic trajectory.

A growing number of American and international companies are slashing jobs in response to President Donald Trump’s sweeping tariffs on global imports. The wave of layoffs, spanning industries from automobiles to consumer goods, is raising red flags about the health of the US labour market and its economic trajectory. Trump’s latest trade policy, rolled out in late March 2025, imposes a 25 per cent tariff on all automobile and auto parts imports, along with days later in April imposing sweeping tariffs on over a dozen trading partners. The Trump administration has framed the move as a national security measure to protect domestic manufacturing. However, the real-world impact is proving far more complex—and costly. The tariffs have increased cost pressure on companies, and while some companies have decided to pass on the additional cost to the consumer, some have resorted to cutting costs by reducing their workforce. Thousands laid off across sectors In just the last few weeks, companies have reported mass job cuts and halted production at facilities across North America. Stellantis NV has temporarily laid off 900 workers in the US and halted output at plants in Mexico and Canada, citing medium- and long-term effects of the tariffs. Volvo Group and Mack Trucks, both hit hard by tariff-related cost spikes and falling demand, have announced more than 800 job cuts across Pennsylvania, Virginia, and Maryland. Meanwhile, Swedish fintech company Klarna is slashing 40 per cent of its workforce as it leans into AI to reduce costs. Consumer goods giant Procter & Gamble is planning to cut 7,000 jobs, nearly 6 per cent of its workforce, over the next two years. The company cited uneven demand and increased input costs due to trade disruptions. Some news reports also revealed that the company plans to exit certain product categories and markets. P&G imports several raw materials and packaging components from China, making it particularly vulnerable to tariff-related price volatility. Steelmaker Cleveland-Cliffs laid off over 1,200 workers, while UPS is cutting 20,000 jobs after seeing a sharp reduction in shipments from major clients like Amazon. Even tech giants like Microsoft, Google, and Amazon have announced tens of thousands of role reductions, citing a mix of automation, falling demand, and global cost pressures. Congressman Ro Khanna has criticised the tariff-driven chaos. “This week, 19 factories had mass layoffs, 15 closed, and over 4,100 factory workers lost their jobs,” he posted on X. He also warned that the latest round of protectionist policies could trigger broader economic pain. Economists sound alarm over recession risk Wall Street is increasingly concerned. JPMorgan’s chief US economist Michael Feroli has downgraded GDP growth projections from 1.3 per cent to -0.3 per cent for 2025, stating that the economy is now expected to contract under the “weight of the tariffs”. Federal Reserve Chair Jerome Powell has echoed the concern, noting that the tariffs may cause persistent inflation and economic drag—effects that could outweigh their intended industrial benefits. Globally, the International Monetary Fund (IMF) has projected a 2.8 per cent annual decline in global output, including a 1.8 per cent drop for the US, due to the new wave of trade barriers. Meanwhile, European brewers are warning of 100,000 potential job losses if the US follows through with levies on beer imports from the EU and Mexico. While the recent job data released in the US has indicated an uptick in hiring and has offered a glimmer of hope for the US labour market, the concerns about unemployment loom as the data also showed a rise in layoffs. Despite these warnings, Trump and his supporters continue to defend the policy as a step toward reshoring industry and protecting US jobs. But, at least so far, the reality playing out on the ground tells a different story.

The wave of layoffs, spanning industries from automobiles to consumer goods, is raising red flags about the health of the US labour market and its economic trajectory.

Trade restrictions spark layoffs at major firms as recession risk rise

In a surprise move, the Reserve Bank of India slashed the repo rate by 50 basis points to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points in a staggered manner.&nbsp;&nbsp;The central bank also shifted its policy stance from 'accommodative' to 'neutral'.&nbsp;Here's what economists, strategists, and leaders from the banking and finance industry had to say:&nbsp;"RBI’s bold move: what next after it cuts by 50bp?": Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING "The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year."&nbsp;"Neutral stance suggests fewer rate cuts ahead": Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation "RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term."&nbsp;"MPC delivered major surprises with repo, CRR cuts": Siddhartha Sanyal, Chief Economist &amp; Head of Research at Bandhan Bank"Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50-basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged.&nbsp;The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission."&nbsp;"Action-packed policy, out-of-the-box thinking": C.S. Setty, Chairman at SBI &amp; Chairman at IBA"A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.&nbsp;The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty."&nbsp;“Very dovish policy, capex boost expected”: Sagar Shah, Head – Domestic Markets, RBL Bank "Very dovish policy frontloading the Repo cut and liquidity infusion. Reduced cost of capital will lay groundwork for capex with a lag of 2 quarters. CRR cut along with Repo cut should lead to transmission faster."&nbsp;"RBI wants banks to act fast": Venkatakrishnan Srinivasan, Managing Partner, Rockfort Fincap"The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts."&nbsp;"Transmission now rests with banks": Madhavi Arora, Economist, Emkay Global Financial Services Ltd. "The ball is in the banks’ court to transmit easier financial conditions faster."&nbsp;"RBI’s intent is growth support amid uncertainty": Amit Bivalkar, Founder Director, Sapient Finserv"The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action."&nbsp;"CRR cut to release ₹2.5 lakh crore liquidity": Dr. Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd. "The RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025.&nbsp;The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5 %. The risks are evenly balanced."&nbsp;"Rate cuts will spur lending, jobs, and growth": Dharan Shah, Founder, Tradonomy.AI "The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events."&nbsp;"Complex messaging: easing now, caution ahead": Sandeep Bagla, CEO, TRUST Mutual Fund"MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future."&nbsp;"Rate cuts support markets and rupee": Amit Pabari, MD, CR Forex "The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system.In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."&nbsp;

The central bank also shifted its policy stance from accommodative to neutral. 

In a surprise move, the Reserve Bank of India slashed the repo rate by 50 basis points to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points in a staggered manner. The central bank also shifted its policy stance from 'accommodative' to 'neutral'. Here's what economists, strategists, and leaders from the banking and finance industry had to say: "RBI’s bold move: what next after it cuts by 50bp?": Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING "The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year." "Neutral stance suggests fewer rate cuts ahead": Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation "RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term." "MPC delivered major surprises with repo, CRR cuts": Siddhartha Sanyal, Chief Economist & Head of Research at Bandhan Bank "Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50-basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged. The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission." "Action-packed policy, out-of-the-box thinking": C.S. Setty, Chairman at SBI & Chairman at IBA "A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action. The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty." “Very dovish policy, capex boost expected”: Sagar Shah, Head – Domestic Markets, RBL Bank "Very dovish policy frontloading the Repo cut and liquidity infusion. Reduced cost of capital will lay groundwork for capex with a lag of 2 quarters. CRR cut along with Repo cut should lead to transmission faster." "RBI wants banks to act fast": Venkatakrishnan Srinivasan, Managing Partner, Rockfort Fincap "The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts." "Transmission now rests with banks": Madhavi Arora, Economist, Emkay Global Financial Services Ltd. "The ball is in the banks’ court to transmit easier financial conditions faster." "RBI’s intent is growth support amid uncertainty": Amit Bivalkar, Founder Director, Sapient Finserv "The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action." "CRR cut to release ₹2.5 lakh crore liquidity": Dr. Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings Ltd. "The RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025. The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5 %. The risks are evenly balanced." "Rate cuts will spur lending, jobs, and growth": Dharan Shah, Founder, Tradonomy.AI "The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events." "Complex messaging: easing now, caution ahead": Sandeep Bagla, CEO, TRUST Mutual Fund "MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future." "Rate cuts support markets and rupee": Amit Pabari, MD, CR Forex "The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system. In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."

Amid global trade tensions, RBI’s surprise 50 bps repo rate cut triggered sharp reactions from top economists, bankers, and strategists.

RBI's bold 50 bps rate cut sparks market buzz: Here's what they say

RBI MPC meeting LIVE Updates: The Reserve Bank of India delivered a powerful policy push this morning, announcing a 50 basis point cut in the repo rate—its third in a row—bringing it down to 5.5 per cent. In a surprise move, the RBI also slashed the Cash Reserve Ratio (CRR) by 100 basis points to 3 per cent, unleashing fresh liquidity into the banking system.RBI Governor Sanjay Malhotra said inflation has eased over the past six months, prompting the central bank to revise its FY26 CPI forecast down to 3.7 per cent from 4 per cent. Meanwhile, India’s GDP growth for FY2025 is projected at a solid 6.5 per cent, backed by steady rural demand and improving urban consumption.Markets cheered the announcements—Sensex and Nifty rebounded sharply, turning green after a weak start, as investors welcomed the growth-supportive stance.

"Reserve Bank of India's bold move: what next after it cuts by 50bp? The RBI cut policy rates by more than expected and changed its policy stance from accommodative to neutral. We think that with this move, the RBI is signalling a near-term pause, while leaving the door open for more easing if growth or inflation weakens further. We continue to expect another 25bp rate cut in the fourth quarter of this year."

Here is the view of Deepali Bhargava, Regional Head of Research, Asia-Pacific, ING:

"RBI may have decided to move quickly to a more appropriate policy rate level after recent headwinds and low inflation prints. A shift toward neutral stance means more rate cuts may be unlikely in the near-term.”

Here is the view of Jeff Ng, Head of Asia Macro Strategy, Sumitomo Mitsui Banking Corporation:

"Today’s monetary policy committee (MPC) meeting sprang several major surprises. The 50 basis point repo rate cut came in as a surprise against consensus and our expectation of a 25bp rate cut. However, given the change in stance of monetary policy from “accommodative” to “neutral” and the RBI’s communication of very little space for more support from monetary policy, our expectation of a terminal repo rate of 5.50% in the current cycle remains largely unchanged.The larger than expected rate cut, coupled with announcement of a large CRR cut around the beginning of the busy season, brings in more focus on transmission of the monetary policy actions into the real economy. Today’s announcement will not only push banks’ external benchmark linked lending rates lower, but will also lower MCLR and deposit rates, thereby, bringing in greater pace and intensity to transmission."

Here is the view of Mr. Siddhartha Sanyal, Chief Economist & Head of Research at Bandhan Bank:

“A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and&nbsp; fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty.”

Here is the view of Mr. C.S. Setty, Chairman at SBI & Chairman at IBA:

“The RBI has front-loaded everything and wants banks to react now. By changing the stance, I think they are trying to indicate no immediate rate cuts,” said Venkatakrishnan Srinivasan, managing partner at financial advisory firm Rockfort Fincap. “

Here is the view of Venkatakrishnan Srinivasan, Managing Partner at Rockfort Fincap:

“The ball is in the banks’ court to transmit easier financial conditions faster,” said Madhavi Arora, an economist at Emkay Global Financial Services Ltd.

Here is the view of Madhavi Arora, Economist at Emkay Global Financial Services Ltd.:

“The RBI’s decision to cut the repo rate by a sharper-than-expected 50 basis points to 5.5% reflects its strong intent to support economic growth amid rising global uncertainties and weak domestic demand. The cumulative 100 bps cut since February 2025, along with the phased 1% CRR reduction, will ease borrowing costs and improve liquidity in the system, potentially boosting credit flow. However, with the shift in stance from ‘accommodative’ to ‘neutral’, the central bank has signaled a pause, choosing to closely monitor inflation trends and global developments before taking further action.”

Here is the view of Mr. Amit Bivalkar, Founder Director, Sapient Finserv:

The&nbsp;RBI’s Monetary Policy Committee (MPC) exceeded expectations by slashing the Repo rate by 50 basis points. Further, the cash reserve ratio (CRR) was reduced by 100 basis points from 4% to 3% in a staggered manner, implemented in four equal tranches of 25 basis points each, in the fortnights beginning September 6, October 4, November 1, and November 29 to provide durable liquidity. The cut in CRR is expected to release primary liquidity of about Rs 2.5 lakh crore to the banking system by the end of November 2025.The RBI changed its stance from ‘accommodative’ to ‘neutral.’ The outlook for food inflation is soft, and the core inflation outlook remains benign. Given the benign&nbsp;inflation, the inflation forecast for the year has been revised downward from 4% to 3.7%. The FY26 GDP growth forecast is maintained at 6.5&nbsp;%. The risks are evenly balanced.

Here is the view of Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuation and Ratings Ltd.:

“The RBI's decisive 50 bps repo rate cut to 5.5% and a 100 bps CRR reduction over four quarters unleash a powerful boost for India’s economy. By lowering borrowing costs and freeing up bank liquidity, sectors like real estate, automobiles, and consumer durables are set to thrive. With CPI inflation at 3.7% and FY26 GDP growth projected at 6.5%, fueled by steady rural demand and rising urban consumption, the USDINR forward rate at ~86.72 signals stability. This dual policy move will likely spur lending, investment, and job creation, despite global uncertainties. Now the RBI stance being neutral, all future RBI events for the next few quarters will be non-events.”

Here is the view of Dharan Shah, Founder, Tradonomy.AI:

“MPC frontloaded the rate cuts, reducing repo rates by 50 bps and also cut CRR by 100 bps. These measures came as a positive surprise to equity markets as there will be greater impetus to growth and there could be faster pick up in the interest rate sectors. Oddly, RBI also changed its stance from accommodative to neutral, thereby signaling that further softening of monetary conditions may not be easily forthcoming. Bond markets experienced some steepening with shorter end of the yield curve seeing some softening. It is complex messaging from RBI where they have eased the policy rates and liquidity but made no promises for the future”

Here is the view of Sandeep Bagla, CEO, TRUST Mutual Fund:

"The Reserve Bank of India has delivered a sharper-than-expected policy easing, cutting the repo rate by 50 basis points to 5.5% and slashing the Cash Reserve Ratio by 100 basis points to 3%. These aggressive rate cuts are providing strong support to Indian equity markets, while the CRR reduction is expected to inject approximately ₹2.5 lakh crore of liquidity into the banking system.In addition, the RBI has shifted its policy stance from 'accommodative' to 'neutral', signalling that interest rates are likely to remain stable in the near term, which is supporting the rupee and limiting any further depreciation."

Here’s what Amit Pabari, MD at CR Forex, says on RBI’s rate cuts

Indian stock markets surged after the Reserve Bank of India announced a larger-than-expected 50 basis point repo rate cut and a 100 basis point CRR reduction. The sensex jumped over 300 points in early trade, while the nifty rose more than 0.5 per cent.Investor sentiment was buoyed by the RBI’s decisive moves to boost liquidity and support growth, with analysts viewing the measures as a strong signal of the central bank’s commitment to navigating global economic uncertainty.

RBI MPC meeting LIVE Updates: Markets rally as RBI delivers jumbo rate cut

RBI Governor Sanjay Malhotra’s MPC address ends.

RBI MPC meeting LIVE Updates: Governor Malhotra address ends 

In a major move to enhance liquidity in the banking system, the Reserve Bank of India to reduce the Cash Reserve Ratio (CRR) by 100 basis points—from 4 per cent to 3 per cent.

RBI MPC meeting LIVE: RBI to reduce Cash Reserve Ratio by 100 bps to boost liquidity

Indian stock markets turned positive following the RBI’s announcement of a 50 basis point repo rate cut. The Sensex reversed early losses to rise over 50 points, while the Nifty also bounced back into the green after opening in the red. Investor sentiment improved on the back of supportive policy measures and a downward revision in the inflation forecast.

RBI MPC meeting LIVE: Markets rebound after RBI rate cut; Sensex, Nifty turn positive

RBI Governor Sanjay Malhotra announced that India’s real GDP growth for FY2025 is projected at 6.5 per cent, supported by steady rural demand and improving urban consumption. However, he flagged ongoing uncertainty in global trade, which continues to weigh on merchandise exports. On the inflation front, the RBI has revised its CPI inflation forecast for FY2025-26 downward to 3.7 per cent from the earlier estimate of 4.0 per cent, citing easing price pressures.

RBI projects FY25 GDP growth at 6.5%, lowers inflation forecast to 3.7%

The Reserve Bank of India has cut the repo rate by 50 basis points, bringing it down to 5.5%, marking the third consecutive rate cut aimed at boosting economic growth as global conditions remain fragile. Announcing the Monetary Policy Committee’s decision, RBI Governor Sanjay Malhotra said, “Inflation has softened in the last six months,” but added that the “last mile of inflation control remains protracted.” He also noted that the global economic backdrop continues to be uncertain, warranting a cautious but supportive policy stance.

RBI MPC meeting LIVE: RBI cuts repo rate by 50 bps to 5.5% amid global uncertainty

Amit Pabari, MD of CR Forex "The Reserve Bank of India is expected to deliver a third consecutive 25-bps rate cut, bringing the repo rate down to 5.75%. While this reflects the central bank’s continued focus on supporting growth, the dovish stance may weigh on the rupee in the near term. A narrowing interest rate differential between India and the U.S. could reduce the appeal of Indian assets for foreign investors, potentially triggering FII outflows and adding pressure on the currency."

RBI MPC meeting LIVE: Rupee at risk

The majority of analysts believe that the Reserve Bank of India (RBI) will reduce the repo rate by 25 basis points (bps) once again, however a study from the State Bank of India (SBI) predicts a massive rate decrease of 50 bps.Based on an evaluation by the RBI, most banks have lowered their repo-linked external benchmark-based lending rates (EBLRs) and the marginal cost of funds-based lending rate (MCLR) in reaction to the 50 basis points drop in the policy repo rate since February 2025. (PTI)

RBI Meeting Announcements LIVE Updates: SBI bets on a 50 bps cut

The Reserve Bank of India's Monetary Policy Committee (MPC) commenced its deliberation on June 4 which faces new headwinds from global trade uncertainties, particularly US tariff actions under US President Donald Trump.As the RBI wraps up its three-day monetary policy meeting today, all eyes are now on what could be the third straight interest rate cut of India. Expectations are high, with investors betting on a 0.25 per cent to 0.5 per cent reduction in rates. Read More <a href="https://www.wionews.com/business-economy/rbi-s-mpc-meeting-will-this-be-the-third-consecutive-rate-cut-1749183187400">https://www.wionews.com/business-economy/rbi-s-mpc-meeting-will-this-be-the-third-consecutive-rate-cut-1749183187400</a>

Curtain raiser: RBI decision time

Reserve Bank of India Governor Sanjay Malhotra will announce the Monetary Policy Committee’s (MPC) decision at 10 am today. The announcement will be live-streamed on the RBI’s official YouTube channel, X (formerly Twitter), and website. A press conference is expected around noon, also available on the same platforms. Stay tuned to WION for real-time updates.

RBI to reveal monetary policy decision at 10 am today

Indian stock markets opened lower today as investors remained cautious ahead of the Reserve Bank of India's policy decision. The BSE Sensex slipped over 75 points in early trade, while the NSE Nifty also opened in the red, dragged down by financial and tech stocks. Market participants are largely staying on the sidelines, awaiting cues from the central bank. The RBI is widely expected to cut the repo rate for the third consecutive time in a bid to support economic growth amid moderating inflation.

Markets open lower as investors await RBI policy decision

The RBI’s policy stance also reflects growing global risks. The ongoing US-China tariff war, tighter global financial conditions, and falling commodity prices are creating a challenging environment for trade and investment. Central banks worldwide — including the Federal Reserve, European Central Bank, and Bank of England — are tilting towards rate cuts to offset geopolitical shocks.By aligning its policy stance with global peers, the RBI is attempting to shield India’s growth engine from external volatility while maintaining price stability.

Global turbulence adds urgency to India’s monetary response

In April 2025, the RBI’s Monetary Policy Committee set the tone for an accommodative shift by trimming the repo rate by 25 basis points, moving it from 6.25 per cent to 6.00 per cent. It was the second back-to-back rate cut this year. More importantly, the policy stance was altered from ‘neutral’ to ‘accommodative’, signalling that the central bank was gearing up to prioritise growth as inflation stayed within comfortable limits.The decision then was unanimous, showcasing a clear consensus among committee members on the need for supportive monetary measures amid softening economic indicators.

Flashback to last rate cut: What happened in April MPC meet? 

If the RBI reduces the repo rate again today, borrowers are likely to benefit through lower EMIs on home, car, and personal loans. Banks typically adjust their marginal cost of lending rate (MCLR) in line with repo rate changes, passing on the benefit to customers — especially for floating-rate loans.On the flip side, deposit rates may also come down, meaning lower returns for savers and retirees. This dual effect makes today’s decision crucial for both households and investors alike.

What a rate cut means for your wallet?

The RBI’s monetary policy is determined by a six-member Monetary Policy Committee, comprising both RBI insiders and government-appointed economists. The current members are:• Sanjay Malhotra&nbsp;– Governor, RBI and MPC chairperson• Michael Patra&nbsp;– RBI Deputy Governor• Rajiv Ranjan&nbsp;– Executive Director, RBI• Ashima Goyal&nbsp;– Economist and professor• Shashanka Bhide&nbsp;– Senior advisor, NCAER• Rekha Jain&nbsp;– Former IIM Ahmedabad professor and telecom policy expertTogether, the team balances inflation targets, growth projections, and macroeconomic risks to decide the repo rate and overall policy stance.

Who decides India’s interest rates? Meet the MPC team

India’s economic data gives the central bank room to act. Consumer price inflation dropped to 3.34 per cent in March, comfortably below the RBI’s medium-term target of 4 per cent. Meanwhile, GDP growth for FY25 is projected at 6.3 per cent, down from 9.2 per cent in FY24, reflecting a significant slowdown in momentum.This “Goldilocks” scenario — slowing growth with benign inflation — strengthens the case for continued monetary easing. A rate cut today would aim to boost consumption, revive investment, and cushion the economy from external shocks.

What about Inflation and GDP expectations? 

Indian equities are likely to kick off the day on a quiet but watchful note, with early GIFT Nifty trends hinting at a flat opening around 24,845.On Thursday, however, markets closed higher in anticipation of a dovish stance from the RBI, with indices like the Nifty 50 rallying above 24,700. Investor focus remains on whether the central bank signals further easing after today. &nbsp;

Market reaction: Cautious start expected all eyes on RBI

As the countdown begins for the RBI’s policy statement, a broad market consensus has formed around another rate cut. According to a Reuters poll conducted between May 19 and 28, 53 of 61 economists believe the RBI will cut rates by 25 basis points. Two forecast a 50-basis point reduction, while six expect the central bank to hold rates steady.Fueling expectations of a deeper cut, SBI Research, in its pre-policy note titled “Prelude to MPC Meeting – June 4–6, 2025”, argued:“We expect a 50-basis point rate cut in June, as a jumbo rate cut could act as a counterbalance to uncertainty and support the credit cycle.”The note cited a combination of subdued domestic demand, global trade frictions, and decelerating investment as reasons for a stronger push from the central bank.

MPC decision day: Will RBI go big with a rate cut?

To unleash new money into the financial sector, the RBI also unexpectedly cut the Cash Reserve Ratio (CRR) by 100 basis points to 3%.

RBI MPC meeting LIVE Updates: The Reserve Bank of India delivered a powerful policy push this morning, announcing a 50 basis point cut in the repo rate—its third in a row—bringing it down to 5.5 per cent. In a surprise move, the RBI also slashed the Cash Reserve Ratio (CRR) by 100 basis points to 3 per cent, unleashing fresh liquidity into the banking system. RBI Governor Sanjay Malhotra said inflation has eased over the past six months, prompting the central bank to revise its FY26 CPI forecast down to 3.7 per cent from 4 per cent. Meanwhile, India’s GDP growth for FY2025 is projected at a solid 6.5 per cent, backed by steady rural demand and improving urban consumption. Markets cheered the announcements—Sensex and Nifty rebounded sharply, turning green after a weak start, as investors welcomed the growth-supportive stance.

The Reserve Bank of India announced a 50 basis point reduction in the repo rate this morning, its third consecutive decrease, bringing it down to 5.5%.&nbsp;

RBI MPC meeting HIGHLIGHTS : RBI MPC unanimously cuts repo rate by 50 basis points to 5.5%

In a bold move to stimulate economic growth and improve credit flow, the Reserve Bank of India (RBI) on June 6 announced a significant 100 basis point (bps) reduction in the Cash Reserve Ratio (CRR), slashing it from 4 per cent to 3 per cent.The cut, aimed at infusing durable liquidity into the banking system, will be implemented in four equal tranches of 25 bps each, beginning on September 6 and continuing through November 29, 2025.Announcing the decision at the end of the three-day Monetary Policy Committee (MPC) meeting, RBI Governor Sanjay Malhotra said the staggered CRR cut is expected to inject approximately ₹2.5 lakh crore ($29.16 billion) into the banking system by the end of the year.The governor emphasised that this step, alongside ongoing liquidity management operations, would reduce banks' cost of funds and improve monetary transmission to the credit markets.“The ball is in the banks’ court to transmit easier financial conditions faster,” said Madhavi Arora, an economist at Emkay Global Financial Services Ltd.In another major move, the MPC also decided to cut the benchmark repo rate by 50 bps to 5.50 per cent, marking the third straight rate cut in a row. The policy stance was revised from “accommodative” to “neutral”, signalling the central bank’s intent to shift toward a more balanced policy framework amid evolving economic conditions.<h2>What is CRR and why does it matter?</h2>The Cash Reserve Ratio (CRR) is a critical monetary policy tool used by the RBI to regulate liquidity and money supply in the economy. It mandates that commercial banks keep a certain percentage of their Net Demand and Time Liabilities (NDTL) as cash reserves with the central bank. This portion of funds, currently earning no interest, cannot be used for lending or investment purposes.By adjusting the CRR, the RBI influences the lending capacity of banks. A higher CRR restricts the funds available with banks for disbursing loans, while a lower CRR enhances their ability to lend, thereby impacting the overall liquidity in the financial system.“The reduction in CRR will provide durable liquidity and reduce the cost of funds for banks, which will aid the transmission of policy rate cuts,” Malhotra said, noting that the staggered implementation gives the banking system time to recalibrate their liquidity positions.<h2>CRR’s role in controlling inflation and boosting growth</h2>CRR is also a powerful tool for managing inflation. In periods of high inflation, the RBI may hike the CRR to absorb excess liquidity and curb overheating in the economy. Conversely, during times of sluggish growth or low inflation, the central bank often lowers CRR to push more funds into the system, encouraging banks to lend more and stimulate investment.The RBI's decision to reduce the CRR is a strategic move aimed at supporting the economy while the global outlook looks bleak.India’s inflation trajectory has been on a downward trend, with the central bank revising its inflation outlook to 3.7 per cent from 4 per cent earlier—well within the targeted range.With inflation pressures easing and the growth rate remaining below the 8-10 per cent needed to become a developed economy by 2047, the central bank appears to be front-loading monetary support.<h2>Liquidity picture and policy rationale</h2>The RBI has already infused ₹9.5 lakh crore ($11.08 billion) of durable liquidity into the banking system since January 2025. This sustained liquidity injection, coupled with the government’s month-end spending and the record ₹2.1 lakh crore ($21.50 billion) surplus transfer from the RBI to the government, has resulted in a significant surplus in system liquidity.This is reflected in the Weighted Average Call Rate (WACR)—the operating target of monetary policy—which has consistently traded at the lower end of the policy corridor. With system liquidity now exceeding ₹3 lakh crore ($34.9 billion) (1.3 per cent of NDTL), market participants have noted a tepid response to the RBI’s Variable Rate Repo (VRR) auctions, and there is growing speculation that the central bank may scale back its daily VRR operations.Governor Malhotra reaffirmed the RBI’s commitment to maintaining orderly liquidity conditions. “We will continue to monitor evolving liquidity and financial market conditions and take further measures as warranted,” he stated.<h2>Impact and outlook</h2>The CRR cut is expected to have a multi-dimensional impact. Firstly, it enhances the dispensable resources with banks, encouraging them to increase lending to businesses and consumers.Secondly, the move will ease funding costs for banks, supporting better transmission of the repo rate cut into lower interest rates across the spectrum.Economists believe this could spur investment and consumption at a time when global economic headwinds and weak private sector capital expenditure remain concerns. Lower lending rates may also provide relief to interest-sensitive sectors such as housing, automobiles, and MSMEs (micro, small and medium enterprises).However, analysts caution that the transmission of lower policy rates to end-borrowers often takes time.So, the RBI’s aggressive dual action—a sizable CRR cut combined with a sharp repo rate reduction—underscores its intent to boost growth without compromising financial stability. With inflation under control and ample liquidity in the system, the central bank has created room for a calibrated push toward stronger economic momentum.

RBI Governor Sanjay Malhotra said the staggered CRR cut is expected to inject approximately ₹2.5 lakh crore into the banking system by the end of the year.

In a bold move to stimulate economic growth and improve credit flow, the Reserve Bank of India (RBI) on June 6 announced a significant 100 basis point (bps) reduction in the Cash Reserve Ratio (CRR), slashing it from 4 per cent to 3 per cent. The cut, aimed at infusing durable liquidity into the banking system, will be implemented in four equal tranches of 25 bps each, beginning on September 6 and continuing through November 29, 2025. Announcing the decision at the end of the three-day Monetary Policy Committee (MPC) meeting, RBI Governor Sanjay Malhotra said the staggered CRR cut is expected to inject approximately ₹2.5 lakh crore ($29.16 billion) into the banking system by the end of the year. The governor emphasised that this step, alongside ongoing liquidity management operations, would reduce banks' cost of funds and improve monetary transmission to the credit markets. “The ball is in the banks’ court to transmit easier financial conditions faster,” said Madhavi Arora, an economist at Emkay Global Financial Services Ltd. In another major move, the MPC also decided to cut the benchmark repo rate by 50 bps to 5.50 per cent, marking the third straight rate cut in a row. The policy stance was revised from “accommodative” to “neutral”, signalling the central bank’s intent to shift toward a more balanced policy framework amid evolving economic conditions. What is CRR and why does it matter? The Cash Reserve Ratio (CRR) is a critical monetary policy tool used by the RBI to regulate liquidity and money supply in the economy. It mandates that commercial banks keep a certain percentage of their Net Demand and Time Liabilities (NDTL) as cash reserves with the central bank. This portion of funds, currently earning no interest, cannot be used for lending or investment purposes. By adjusting the CRR, the RBI influences the lending capacity of banks. A higher CRR restricts the funds available with banks for disbursing loans, while a lower CRR enhances their ability to lend, thereby impacting the overall liquidity in the financial system. “The reduction in CRR will provide durable liquidity and reduce the cost of funds for banks, which will aid the transmission of policy rate cuts,” Malhotra said, noting that the staggered implementation gives the banking system time to recalibrate their liquidity positions. CRR’s role in controlling inflation and boosting growth CRR is also a powerful tool for managing inflation. In periods of high inflation, the RBI may hike the CRR to absorb excess liquidity and curb overheating in the economy. Conversely, during times of sluggish growth or low inflation, the central bank often lowers CRR to push more funds into the system, encouraging banks to lend more and stimulate investment. The RBI's decision to reduce the CRR is a strategic move aimed at supporting the economy while the global outlook looks bleak. India’s inflation trajectory has been on a downward trend, with the central bank revising its inflation outlook to 3.7 per cent from 4 per cent earlier—well within the targeted range. With inflation pressures easing and the growth rate remaining below the 8-10 per cent needed to become a developed economy by 2047, the central bank appears to be front-loading monetary support. Liquidity picture and policy rationale The RBI has already infused ₹9.5 lakh crore ($11.08 billion) of durable liquidity into the banking system since January 2025. This sustained liquidity injection, coupled with the government’s month-end spending and the record ₹2.1 lakh crore ($21.50 billion) surplus transfer from the RBI to the government, has resulted in a significant surplus in system liquidity. This is reflected in the Weighted Average Call Rate (WACR)—the operating target of monetary policy—which has consistently traded at the lower end of the policy corridor. With system liquidity now exceeding ₹3 lakh crore ($34.9 billion) (1.3 per cent of NDTL), market participants have noted a tepid response to the RBI’s Variable Rate Repo (VRR) auctions, and there is growing speculation that the central bank may scale back its daily VRR operations. Governor Malhotra reaffirmed the RBI’s commitment to maintaining orderly liquidity conditions. “We will continue to monitor evolving liquidity and financial market conditions and take further measures as warranted,” he stated. Impact and outlook The CRR cut is expected to have a multi-dimensional impact. Firstly, it enhances the dispensable resources with banks, encouraging them to increase lending to businesses and consumers. Secondly, the move will ease funding costs for banks, supporting better transmission of the repo rate cut into lower interest rates across the spectrum. Economists believe this could spur investment and consumption at a time when global economic headwinds and weak private sector capital expenditure remain concerns. Lower lending rates may also provide relief to interest-sensitive sectors such as housing, automobiles, and MSMEs (micro, small and medium enterprises). However, analysts caution that the transmission of lower policy rates to end-borrowers often takes time. So, the RBI’s aggressive dual action—a sizable CRR cut combined with a sharp repo rate reduction—underscores its intent to boost growth without compromising financial stability. With inflation under control and ample liquidity in the system, the central bank has created room for a calibrated push toward stronger economic momentum.

RBI Governor Sanjay Malhotra said the staggered CRR cut is expected to inject approximately ₹2.5 lakh crore into the banking system by the end of the year.

RBI to slash cash reserve ratio: What it means for banks, borrowers, and inflation?

In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures.&nbsp;&nbsp;These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. &nbsp;Here are the key announcements explained in detail:<h2>1. Repo rate cut by 50 basis points to 5.5%&nbsp;</h2>The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April.&nbsp; &nbsp;The cumulative rate cut now stands at 100 basis points for the calendar year.&nbsp;The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy.<h2>2. CRR to be reduced by 100 basis points in four stages</h2>In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. &nbsp;This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29.&nbsp; &nbsp;According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth.&nbsp;<h2>3. Inflation forecast for FY26 lowered to 3.7%</h2>The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months.&nbsp;According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices.&nbsp;Here’s the revised quarterly CPI outlook:• Q1: 2.9 per cent• Q2: 3.4 per cent• Q3: 3.9 per cent• Q4: 4.4 per cent<h2>4. GDP growth forecast retained at 6.5% for FY26</h2>Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy.&nbsp;Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows.Here are quarter-wise GDP estimates:• Q1: 6.5 per cent• Q2: 6.7 per cent• Q3: 6.6 per cent• Q4: 6.3 per cent<h2>5. Policy stance shifts from ‘accommodative’ to ‘neutral’</h2>In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts.&nbsp;While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks.<h2>6. Sector-specific insights: lending stress eases, forex reserves strong</h2>Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds.&nbsp; &nbsp;The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end.&nbsp;The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity.&nbsp;&nbsp;At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment. &nbsp;

RBI unveils pro-growth measures including a repo rate cut and CRR reduction during its June 2025 MPC meet, aiming to support economic recovery.


In a bold move to revive growth and ease financing conditions, the Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting on June 6, 2025, announced a series of pro-growth measures. These include another repo rate cut, a phased CRR reduction, and a downward revision in the inflation forecast. The policy signals a continued effort by the central bank to support the economy amid a favourable inflation outlook and improving macroeconomic conditions. Here are the key announcements explained in detail: 1. Repo rate cut by 50 basis points to 5.5% The RBI slashed the repo rate by 50 basis points, bringing it down to 5.5 per cent. This marks the third consecutive repo rate cut in 2025, following a 25-basis point cut in February, and another 25-basis point reduction in April. The cumulative rate cut now stands at 100 basis points for the calendar year. The repo rate is the rate at which the RBI lends to commercial banks. Lowering this rate makes loans cheaper, potentially boosting credit demand from consumers and corporates. With this aggressive rate action, the RBI aims to energise investment and spending across key sectors of the economy. 2. CRR to be reduced by 100 basis points in four stages In a major liquidity-boosting measure, the RBI also announced a 100-basis point cut in the Cash Reserve Ratio (CRR) — from 4 per cent to 3 per cent. The CRR is the minimum percentage of a bank’s total deposits that must be held in reserve with the central bank. This reduction will be implemented in four tranches — on September 6, October 4, November 1, and November 29. According to the RBI, this move will inject nearly ₹2.5 lakh crore into the banking system, enhancing liquidity and supporting stronger credit growth. 3. Inflation forecast for FY26 lowered to 3.7% The RBI revised down its inflation forecast for FY26 to 3.7 per cent, from its earlier estimate of 4 per cent. This signals that the central bank sees price pressures easing in the coming months. According to Governor Malhotra, factors such as record wheat production, higher output of pulses, and a moderation in global commodity prices are expected to help keep inflation in check. However, he cautioned that the RBI remains watchful of weather-related risks that could affect food prices. Here’s the revised quarterly CPI outlook: • Q1: 2.9 per cent • Q2: 3.4 per cent • Q3: 3.9 per cent • Q4: 4.4 per cent 4. GDP growth forecast retained at 6.5% for FY26 Despite the rate cuts and liquidity measures, the RBI chose to keep its GDP growth projection unchanged at 6.5 per cent for FY26, reflecting confidence in the resilience of the Indian economy. Growth is expected to be driven by reviving investment activity, steady rural demand, and above-normal monsoon forecasts. However, the central bank also highlighted downside risks from global trade tensions, weather uncertainties, and slower foreign inflows. Here are quarter-wise GDP estimates: • Q1: 6.5 per cent • Q2: 6.7 per cent • Q3: 6.6 per cent • Q4: 6.3 per cent 5. Policy stance shifts from ‘accommodative’ to ‘neutral’ In a notable shift, the MPC voted to change its policy stance from ‘accommodative’ to ‘neutral’, marking the end of an ultra-easy monetary phase. This means the central bank will now make future rate decisions based on evolving data, rather than being biased toward further cuts. While the RBI remains supportive of growth, it has also signalled readiness to respond quickly to any resurgence in inflation or external shocks. 6. Sector-specific insights: lending stress eases, forex reserves strong Governor Malhotra noted that stress in unsecured loans and credit card segments has eased, although microfinance loans remain under pressure. On the external front, India’s merchandise and services exports are holding up well despite global headwinds. The current account deficit (CAD) for FY26 is projected to remain within sustainable levels, supported by resilient remittance inflows and a strong forex reserve position of $691.5 billion as of May-end. The June 2025 policy signals a strong push to accelerate India’s growth cycle, supported by lower rates and higher liquidity. At the same time, the RBI has shown prudence by adopting a neutral stance, reflecting its intent to remain flexible in a fluid global environment.

RBI announces a repo rate cut, CRR reduction, and lower inflation forecast to boost growth and liquidity.

RBI MPC meeting: Here are the key highlights from the central bank’s June 2025 policy review

In a significant move aimed at bolstering growth amid a benign inflation outlook, the Reserve Bank of India (RBI) on June 6 slashed the repo rate by 50 basis points (bps) to 5.50 per cent from 6 per cent.This marks the third consecutive rate cut by the RBI’s Monetary Policy Committee (MPC), bringing the cumulative reduction to 100 bps since February 2025. The central bank also announced a shift in its policy stance from ‘accommodative’ to ‘neutral’.RBI Governor Sanjay Malhotra said the front-loaded rate cut was necessitated by a clear moderation in inflation and persistent global uncertainties impacting domestic growth.He noted that “inflation has softened significantly over the last six months”, with the latest Consumer Price Index (CPI) reading at 3.2 per cent, well below RBI’s 4 per cent target.&nbsp;“The near-term and medium-term outlook gives us confidence of a durable alignment of inflation with the target. It may even undershoot the margin,” Malhotra said.<h2>GDP growth forecast unchanged</h2>Despite the rate cut, the RBI maintained its FY26 GDP growth forecast at 6.5 per cent, citing resilience in domestic activity. Private consumption remains healthy, and both the services and agriculture sectors are expected to sustain momentum.RBI also kept the quarterly projections unchanged at 6.5 per cent for Q1, 6.7 per cent for Q2, 6.6 per cent for Q3 and 6.3 per cent for Q4.This is in comparison with Moody’s Ratings’ Indian economic growth projection between 5.5 per cent to 6.5 per cent and the IMF’s projection of 6.2 per cent for the calendar year 2025.Malhotra noted strong performance in merchandise exports in April and a revival in investment activity. He acknowledged that while rural demand is steady, urban demand is showing signs of further improvement.<h2>Inflation outlook revised downward</h2>The RBI has sharply revised its FY26 inflation projection down to 3.7 per cent rom the previous estimate of 4 per cent. According to the governor, food prices have eased and core inflation remains subdued.Quarterly inflation forecasts have also been moderated:Q1 FY26: 2.9 per cent (down from 3.6 per cent)Q2 FY26: 3.4 per cent (down from 3.9 per cent)Q3 FY26: 3.9 per cent (unchanged)Q4 FY26: 4.4 per cent (unchanged)The RBI attributed the outlook to a likely above-normal monsoon, record wheat production, and easing global commodity prices.However, he also warned of risks from weather uncertainties and volatile global trade conditions.<h2>CRR cut to inject liquidity</h2>In a surprise move, the RBI also announced a 100 bps cut in the Cash Reserve Ratio (CRR) to 3 per cent, which will release ₹2.5 lakh crore ($291 billion) of primary liquidity into the system.This reduction in CRR will be done in four tranches. The step is expected to reduce the cost of funds for banks and support more effective transmission of monetary policy.“This CRR cut will not only augment durable liquidity but also improve funding conditions for businesses and consumers alike,” Malhotra said.While the RBI's tone was broadly optimistic, it flagged multiple risks, including fragile global trade, rising geopolitical tensions, and uncertainties related to AI-driven disruptions in financial markets. Malhotra emphasised the need for constant vigilance and data-driven decision-making.“We have very limited space left for further monetary accommodation. From here, every move will depend on incoming data and evolving macroeconomic realities,” he added.Indian stock markets welcomed the announcement, with benchmark indices the Sensex and the Nifty 50 both rising nearly 0.7% at 11:00 am IST.

RBI Governor Sanjay Malhotra said the front-loaded rate cut was necessitated by a clear moderation in inflation and persistent global uncertainties impacting domestic growth.

In a significant move aimed at bolstering growth amid a benign inflation outlook, the Reserve Bank of India (RBI) on June 6 slashed the repo rate by 50 basis points (bps) to 5.50 per cent from 6 per cent. This marks the third consecutive rate cut by the RBI’s Monetary Policy Committee (MPC), bringing the cumulative reduction to 100 bps since February 2025. The central bank also announced a shift in its policy stance from ‘accommodative’ to ‘neutral’. RBI Governor Sanjay Malhotra said the front-loaded rate cut was necessitated by a clear moderation in inflation and persistent global uncertainties impacting domestic growth. He noted that “inflation has softened significantly over the last six months”, with the latest Consumer Price Index (CPI) reading at 3.2 per cent, well below RBI’s 4 per cent target. “The near-term and medium-term outlook gives us confidence of a durable alignment of inflation with the target. It may even undershoot the margin,” Malhotra said. GDP growth forecast unchanged Despite the rate cut, the RBI maintained its FY26 GDP growth forecast at 6.5 per cent, citing resilience in domestic activity. Private consumption remains healthy, and both the services and agriculture sectors are expected to sustain momentum. RBI also kept the quarterly projections unchanged at 6.5 per cent for Q1, 6.7 per cent for Q2, 6.6 per cent for Q3 and 6.3 per cent for Q4. This is in comparison with Moody’s Ratings’ Indian economic growth projection between 5.5 per cent to 6.5 per cent and the IMF’s projection of 6.2 per cent for the calendar year 2025. Malhotra noted strong performance in merchandise exports in April and a revival in investment activity. He acknowledged that while rural demand is steady, urban demand is showing signs of further improvement. Inflation outlook revised downward The RBI has sharply revised its FY26 inflation projection down to 3.7 per cent rom the previous estimate of 4 per cent. According to the governor, food prices have eased and core inflation remains subdued. Quarterly inflation forecasts have also been moderated: Q1 FY26: 2.9 per cent (down from 3.6 per cent) Q2 FY26: 3.4 per cent (down from 3.9 per cent) Q3 FY26: 3.9 per cent (unchanged) Q4 FY26: 4.4 per cent (unchanged) The RBI attributed the outlook to a likely above-normal monsoon, record wheat production, and easing global commodity prices. However, he also warned of risks from weather uncertainties and volatile global trade conditions. CRR cut to inject liquidity In a surprise move, the RBI also announced a 100 bps cut in the Cash Reserve Ratio (CRR) to 3 per cent, which will release ₹2.5 lakh crore ($291 billion) of primary liquidity into the system. This reduction in CRR will be done in four tranches. The step is expected to reduce the cost of funds for banks and support more effective transmission of monetary policy. “This CRR cut will not only augment durable liquidity but also improve funding conditions for businesses and consumers alike,” Malhotra said. While the RBI's tone was broadly optimistic, it flagged multiple risks, including fragile global trade, rising geopolitical tensions, and uncertainties related to AI-driven disruptions in financial markets. Malhotra emphasised the need for constant vigilance and data-driven decision-making. “We have very limited space left for further monetary accommodation. From here, every move will depend on incoming data and evolving macroeconomic realities,” he added. Indian stock markets welcomed the announcement, with benchmark indices the Sensex and the Nifty 50 both rising nearly 0.7% at 11:00 am IST.

RBI Governor Sanjay Malhotra said the front-loaded rate cut was necessitated by a clear moderation in inflation and persistent global uncertainties impacting domestic growth.

Rate cut hat-trick: RBI goes big with 0.5% cut, stance turns neutral

The European Central Bank (ECB) has cut its key interest rates by 25 basis points, marking a pivotal moment in its monetary policy cycle and offering relief to businesses and households amid persistent geopolitical uncertainty.&nbsp;The widely anticipated decision, announced on June 5, brings the ECB’s deposit facility rate down to 2 per cent, the main refinancing operations rate to 2.15 per cent, and the marginal lending facility to 2.40 per cent, effective June 11, 2025.European markets reacted positively. The pan-European Stoxx 600 index rose 0.9 per cent, while bond yields across the eurozone fell, reflecting investor confidence in looser monetary conditions.&nbsp;The euro gained 0.6 per cent against the dollar after ECB President Christine Lagarde’s remarks suggested the central bank may be nearing the end of its rate-cutting cycle.<h2>Markets react positively to rate cut</h2>Bond markets rallied following the ECB’s announcement. Yields on benchmark 10-year government bonds fell across major eurozone economies. German yields dropped 4 basis points, while France, Spain, and Italy saw yields decline by 3 to 5 basis points. As bond yields move inversely to prices, the drop indicated growing demand from investors anticipating a dovish rate environment.Stock markets were also buoyant. Germany’s DAX rose 0.2 per cent, the UK’s FTSE 100 edged up 0.1 per cent, and the Stoxx Europe 600 closed higher by 0.9 per cent. France’s CAC 40 was the lone major index to close slightly down, falling 0.2 per cent.ECB cites cooling Inflation, stronger euroIn its policy statement, the ECB said the decision to lower rates was driven by updated inflation projections and improved monetary policy transmission.&nbsp;Headline inflation has cooled to 1.9 per cent in May, slightly below the ECB’s 2 per cent medium-term target, prompting the revision.Revised projections show inflation averaging 2.0 per cent in 2025, down from 2.3 per cent forecast in March, with a further decline to 1.6 per cent in 2026.&nbsp;The central bank attributed the downgrades to lower energy prices and a stronger euro. Core inflation (excluding food and energy) is expected to remain elevated at 2.4 per cent in 2025, but fall to 1.9 per cent by 2027.“We are in a good place,” Lagarde told reporters, though she emphasised the path ahead remains data-dependent and shrouded in uncertainty. One Governing Council member opposed the cut, underlining internal divisions as policymakers weigh global risks.<h2>Trade tensions cloud growth outlook</h2>The ECB also left its GDP growth forecast for 2025 unchanged at 0.9 per cent, acknowledging a robust first quarter but warning of weaker prospects ahead due to trade disruptions.&nbsp;Tensions with the US have escalated following President Donald Trump’s tariffs on European goods, starting at 20 per cent and potentially rising to 50 per cent. Although both sides have agreed to pause retaliatory measures until July 14 to allow negotiations, concerns remain.A further escalation could drag both growth and inflation below baseline projections, the ECB warned. However, a benign resolution could offer modest upside.“Uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term,” the bank noted in a statement. Yet rising public spending—particularly on defence and infrastructure—and strong labour markets are seen as buffers against global shocks.<h2>Rate path ahead</h2>Despite delivering its eighth rate cut since mid-2023, the ECB signalled a cautious stance going forward. Lagarde made clear that the central bank is not pre-committing to a specific rate trajectory, reinforcing a “meeting-by-meeting” approach based on evolving data. However, the president did indicate that ECB is “nearing the end” of its rate-cutting cycle.Analysts remain divided on future moves. While some argue that the ECB should pause to assess the impact of the cuts so far, others believe there is room for further easing if inflation continues to fall and growth weakens.Lagarde also dismissed speculation about her departure from the ECB to join the World Economic Forum, affirming, “I am determined to complete my term. Period.”

The widely anticipated decision, announced on June 5, brings the ECB’s deposit facility rate down to 2 per cent, the main refinancing operations rate to 2.15 per cent, and the marginal lending facility to 2.40 per cent, effective June 11, 2025.

The European Central Bank (ECB) has cut its key interest rates by 25 basis points, marking a pivotal moment in its monetary policy cycle and offering relief to businesses and households amid persistent geopolitical uncertainty. The widely anticipated decision, announced on June 5, brings the ECB’s deposit facility rate down to 2 per cent, the main refinancing operations rate to 2.15 per cent, and the marginal lending facility to 2.40 per cent, effective June 11, 2025. European markets reacted positively. The pan-European Stoxx 600 index rose 0.9 per cent, while bond yields across the eurozone fell, reflecting investor confidence in looser monetary conditions. The euro gained 0.6 per cent against the dollar after ECB President Christine Lagarde’s remarks suggested the central bank may be nearing the end of its rate-cutting cycle. Markets react positively to rate cut Bond markets rallied following the ECB’s announcement. Yields on benchmark 10-year government bonds fell across major eurozone economies. German yields dropped 4 basis points, while France, Spain, and Italy saw yields decline by 3 to 5 basis points. As bond yields move inversely to prices, the drop indicated growing demand from investors anticipating a dovish rate environment. Stock markets were also buoyant. Germany’s DAX rose 0.2 per cent, the UK’s FTSE 100 edged up 0.1 per cent, and the Stoxx Europe 600 closed higher by 0.9 per cent. France’s CAC 40 was the lone major index to close slightly down, falling 0.2 per cent. ECB cites cooling Inflation, stronger euro In its policy statement, the ECB said the decision to lower rates was driven by updated inflation projections and improved monetary policy transmission. Headline inflation has cooled to 1.9 per cent in May, slightly below the ECB’s 2 per cent medium-term target, prompting the revision. Revised projections show inflation averaging 2.0 per cent in 2025, down from 2.3 per cent forecast in March, with a further decline to 1.6 per cent in 2026. The central bank attributed the downgrades to lower energy prices and a stronger euro. Core inflation (excluding food and energy) is expected to remain elevated at 2.4 per cent in 2025, but fall to 1.9 per cent by 2027. “We are in a good place,” Lagarde told reporters, though she emphasised the path ahead remains data-dependent and shrouded in uncertainty. One Governing Council member opposed the cut, underlining internal divisions as policymakers weigh global risks. Trade tensions cloud growth outlook The ECB also left its GDP growth forecast for 2025 unchanged at 0.9 per cent, acknowledging a robust first quarter but warning of weaker prospects ahead due to trade disruptions. Tensions with the US have escalated following President Donald Trump’s tariffs on European goods, starting at 20 per cent and potentially rising to 50 per cent. Although both sides have agreed to pause retaliatory measures until July 14 to allow negotiations, concerns remain. A further escalation could drag both growth and inflation below baseline projections, the ECB warned. However, a benign resolution could offer modest upside. “Uncertainty surrounding trade policies is expected to weigh on business investment and exports, especially in the short term,” the bank noted in a statement. Yet rising public spending—particularly on defence and infrastructure—and strong labour markets are seen as buffers against global shocks. Rate path ahead Despite delivering its eighth rate cut since mid-2023, the ECB signalled a cautious stance going forward. Lagarde made clear that the central bank is not pre-committing to a specific rate trajectory, reinforcing a “meeting-by-meeting” approach based on evolving data. However, the president did indicate that ECB is “nearing the end” of its rate-cutting cycle. Analysts remain divided on future moves. While some argue that the ECB should pause to assess the impact of the cuts so far, others believe there is room for further easing if inflation continues to fall and growth weakens. Lagarde also dismissed speculation about her departure from the ECB to join the World Economic Forum, affirming, “I am determined to complete my term. Period.”

The widely anticipated decision, announced on June 5, brings the ECB’s deposit facility rate down to 2 per cent, the main refinancing operations rate to 2.15 per cent, and the marginal lending facility to 2.40 per cent, effective June 11, 2025.

ECB cuts rates by 25 basis points as inflation cools, trade tensions loom

The Reserve Bank of India's Monetary Policy Committee (MPC) commenced its deliberation on June 4 which faces new headwinds from global trade uncertainties, particularly US tariff actions under US President Donald Trump.&nbsp;As the RBI wraps up its three-day monetary policy meeting today, all eyes are now on what could be the third straight interest rate cut of India. Expectations are high, with investors betting on a 0.25 per cent to 0.5 per cent reduction in rates.&nbsp;Currently, India’s benchmark rate stands at 6 per cent, and a cut could make borrowing cheaper across the board, giving a boost to consumption, financials, and real estate stocks.&nbsp;In April 2025, the central bank changed its stance from ‘neutral’ to ‘accommodative.’&nbsp; Delivering his speech after the April MPC meet, RBI Governor Sanjay Malhotra said that RBI’s stance provides policy rate guidance, without any direct guidance on liquidity management.&nbsp;Inflation has cooled in recent months and now sits comfortably below the RBI’s 4 per cent target, giving the central bank room to ease.&nbsp;Economists expect that the central bank is unlikely to change its growth projections, considering the risks amid trade and geopolitical uncertainties. While India, one of the fastest-growing major economies, stands tall in a slowing global landscape, some believe there will be a downward revision of RBI's projection.&nbsp;During the April policy review, Malhotra had revised India's growth for FY26 to 6.5 per cent, down from 6.7 per cent announced in the February meeting.&nbsp;Malhotra is expected to address the media shortly, shedding light on economic growth, inflation, and the challenges ahead amid looming uncertainties.&nbsp;Market expectations&nbsp;The Indian benchmark indices, The BSE Sensex and the Nifty 50, are likely to kick off the day on a quiet but watchful note on June 6 amid mixed global market cues and ahead of the RBI policy today.&nbsp;The trends on Gift Nifty also indicate a tepid start for the Indian benchmark index as it opens flat around 24,845, a discount of nearly 20 points from the Nifty futures’ previous close.&nbsp;On June 5, the domestic equity market indices ended more than 0.5 per cent higher each, with the benchmark Nifty 50 closing above 24,700 level. While the Sensex gained 443.79 points to close at 81,442.04.&nbsp;Global investors are watching closely, and with just hours to go for the announcement, markets remain on edge. Stay tuned—we’re tracking every development for you.

India’s benchmark rate stands at 6 per cent, and a cut could make borrowing cheaper across the board, giving a boost to consumption, financials, and real estate stocks.

The Reserve Bank of India's Monetary Policy Committee (MPC) commenced its deliberation on June 4 which faces new headwinds from global trade uncertainties, particularly US tariff actions under US President Donald Trump. As the RBI wraps up its three-day monetary policy meeting today, all eyes are now on what could be the third straight interest rate cut of India. Expectations are high, with investors betting on a 0.25 per cent to 0.5 per cent reduction in rates. Currently, India’s benchmark rate stands at 6 per cent, and a cut could make borrowing cheaper across the board, giving a boost to consumption, financials, and real estate stocks. In April 2025, the central bank changed its stance from ‘neutral’ to ‘accommodative.’ Delivering his speech after the April MPC meet, RBI Governor Sanjay Malhotra said that RBI’s stance provides policy rate guidance, without any direct guidance on liquidity management. Inflation has cooled in recent months and now sits comfortably below the RBI’s 4 per cent target, giving the central bank room to ease. Economists expect that the central bank is unlikely to change its growth projections, considering the risks amid trade and geopolitical uncertainties. While India, one of the fastest-growing major economies, stands tall in a slowing global landscape, some believe there will be a downward revision of RBI's projection. During the April policy review, Malhotra had revised India's growth for FY26 to 6.5 per cent, down from 6.7 per cent announced in the February meeting. Malhotra is expected to address the media shortly, shedding light on economic growth, inflation, and the challenges ahead amid looming uncertainties. Market expectations The Indian benchmark indices, The BSE Sensex and the Nifty 50, are likely to kick off the day on a quiet but watchful note on June 6 amid mixed global market cues and ahead of the RBI policy today. The trends on Gift Nifty also indicate a tepid start for the Indian benchmark index as it opens flat around 24,845, a discount of nearly 20 points from the Nifty futures’ previous close. On June 5, the domestic equity market indices ended more than 0.5 per cent higher each, with the benchmark Nifty 50 closing above 24,700 level. While the Sensex gained 443.79 points to close at 81,442.04. Global investors are watching closely, and with just hours to go for the announcement, markets remain on edge. Stay tuned—we’re tracking every development for you.

India’s benchmark rate stands at 6 per cent, and a cut could make borrowing cheaper across the board, giving a boost to consumption, financials, and real estate stocks.

RBI’s MPC meeting: Will this be the third consecutive rate cut?

India's popular unified payments interface (UPI) is emerging as a global powerhouse. UPI transactions have seen a significant surge since their inception during COVID. In this article, we dive into the numbers and decode how UPI is now poised to overtake Visa in daily transaction volume.India's popular and home-grown cutting-edge fintech, UPI, is fast becoming the top choice for digital retail payments. In terms of the value of transactions, UPI is already way ahead.<h2>India's UPI surge nears a new milestone</h2>The value of UPI transactions last month crossed 25 lakh crore rupees, 12 times that of all card transaction value. In terms of daily transaction volume, UPI is set to surpass that of global payments behemoth Visa soon. That will make UPI the world's largest retail interbank payment settlement network. In terms of volumes, Visa does not share daily transaction details. Still, looking at the figures available, UPI is fast closing in on transaction volumes through card networks. On June 1 and 2, UPI reported 644 million and 650 million transactions, respectively. That is just above the visa's FY-24 global daily average of 639 million. The number of daily transactions reported by UPI increased from 630 million in early May to about 650 million in just the first two days of June. UPI experiences a 5-7 per cent month-on-month rise and a 40 per cent yearly growth. That is driven by an increase in internet penetration and more individuals embracing digital payments. Transactions processed by Visa are increasing at a rate of 10 per cent each year. The current upward trend suggests that, over the next two or three months, UPI will have more daily average transactions than Visa. The new milestone will make it even more remarkable because of the difference in the payment settlement methodology of card networks and the UPI. UPI's payment settlement approach is real-time, while card networks like Visa and Mastercard use deferred settlement methodology. UPI facilitates almost 85 per cent of all digital payments in the country. Not surprisingly, an RBI report showed India now accounts for nearly half of all real-time payment transactions.

The value of UPI transactions last month crossed 25 lakh crore rupees, 12 times that of all card transaction value.

India's popular unified payments interface (UPI) is emerging as a global powerhouse. UPI transactions have seen a significant surge since their inception during COVID. In this article, we dive into the numbers and decode how UPI is now poised to overtake Visa in daily transaction volume. India's popular and home-grown cutting-edge fintech, UPI, is fast becoming the top choice for digital retail payments. In terms of the value of transactions, UPI is already way ahead. India's UPI surge nears a new milestone The value of UPI transactions last month crossed 25 lakh crore rupees, 12 times that of all card transaction value. In terms of daily transaction volume, UPI is set to surpass that of global payments behemoth Visa soon. That will make UPI the world's largest retail interbank payment settlement network. In terms of volumes, Visa does not share daily transaction details. Still, looking at the figures available, UPI is fast closing in on transaction volumes through card networks. On June 1 and 2, UPI reported 644 million and 650 million transactions, respectively. That is just above the visa's FY-24 global daily average of 639 million. The number of daily transactions reported by UPI increased from 630 million in early May to about 650 million in just the first two days of June. UPI experiences a 5-7 per cent month-on-month rise and a 40 per cent yearly growth. That is driven by an increase in internet penetration and more individuals embracing digital payments. Transactions processed by Visa are increasing at a rate of 10 per cent each year. The current upward trend suggests that, over the next two or three months, UPI will have more daily average transactions than Visa. The new milestone will make it even more remarkable because of the difference in the payment settlement methodology of card networks and the UPI. UPI's payment settlement approach is real-time, while card networks like Visa and Mastercard use deferred settlement methodology. UPI facilitates almost 85 per cent of all digital payments in the country. Not surprisingly, an RBI report showed India now accounts for nearly half of all real-time payment transactions.

The value of UPI transactions last month crossed 25 lakh crore rupees, 12 times that of all card transaction value.

World-beater in the making: India's UPI

China is intensifying efforts to tax citizens’ overseas income, expanding a campaign that once focused on the ultra-rich to now include less wealthy individuals.The broadened crackdown is part of Beijing’s attempt to boost fiscal revenue amid record budget deficits and economic headwinds, Bloomberg reported, citing people familiar with the matter.Tax officials are now scrutinising a wider range of offshore income, including investment returns, dividends, and employee stock options, Bloomberg said.These investment gains can be taxed at rates as high as 20 per cent. While last year’s campaign largely targeted individuals with assets exceeding $10 million, tax service providers are now seeing a surge in enquiries from clients with less than $1 million in assets.<h2>Broader surveillance as deficits soar</h2>The stepped-up enforcement comes as Chinese authorities seek to shore up revenue amid a weakening economy, rising stimulus spending, and diminishing local government income from land sales.According to Bloomberg calculations based on official data, China’s budget gap in the first four months of 2025 soared by more than 50 per cent year-on-year to over $360 billion—a record for the period.Total income in the central government’s two main fiscal accounts fell by 1.3 per cent from a year earlier, while expenditures surged by 7.2 per cent, exacerbating the deficit. Beijing’s stimulus measures, aimed at mitigating the impact of US tariffs and reviving domestic confidence, have increased pressure on the public coffers.Tax bureaus in cities such as Beijing and Shanghai, as well as provinces including Zhejiang, have issued public advisories urging residents to review and report their offshore income before the June 30 deadline for 2024 income declarations.According to Bloomberg, notices issued by the local governments show that they began coordinating enforcement efforts as early as March, after big data analysis revealed a number of residents had not reported overseas gains.In some cases publicised by tax authorities, individuals were asked to pay back overdue tax and penalties amounting to just over 127,000 yuan ($17,720), underscoring how enforcement is now reaching middle-income earners.<h2>Data sharing and the global tax net</h2>China’s latest tax push builds on its adoption of the Common Reporting Standard (CRS) in 2018—a global tax information-sharing framework developed by the OECD to combat tax evasion. Through CRS, China automatically receives data from nearly 150 jurisdictions regarding financial accounts held by Chinese residents abroad.While China’s tax laws have long mandated that residents declare and pay tax on worldwide income, enforcement had been lax until recent years. The shift coincides with President Xi Jinping’s “common prosperity” campaign, aimed at narrowing wealth gaps and increasing redistribution in the country.Amid domestic uncertainty, more Chinese investors have sought to move wealth abroad. Bloomberg data shows that mainland investors have funnelled over HK$658 billion ($83.9 billion) into Hong Kong-listed stocks via the cross-border trading link this year—more than double the outflows during the same period in 2024.Bloomberg Intelligence forecasts that personal investable assets in mainland China could soar to $80 trillion by 2030, with overseas investments rising to 11 per cent of household investable wealth, up from 8 per cent in 2023.As Beijing broadens its tax net and enhances surveillance of offshore wealth, analysts say middle-class Chinese investors with modest foreign holdings are increasingly likely to come under scrutiny. With the deadline looming and enforcement ramping up, the message from Chinese tax authorities is clear: no overseas income is too small to escape attention.

The broadened crackdown is part of Beijing’s attempt to boost fiscal revenue amid record budget deficits and economic headwinds.

China is intensifying efforts to tax citizens’ overseas income, expanding a campaign that once focused on the ultra-rich to now include less wealthy individuals. The broadened crackdown is part of Beijing’s attempt to boost fiscal revenue amid record budget deficits and economic headwinds, Bloomberg reported, citing people familiar with the matter. Tax officials are now scrutinising a wider range of offshore income, including investment returns, dividends, and employee stock options, Bloomberg said. These investment gains can be taxed at rates as high as 20 per cent. While last year’s campaign largely targeted individuals with assets exceeding $10 million, tax service providers are now seeing a surge in enquiries from clients with less than $1 million in assets. Broader surveillance as deficits soar The stepped-up enforcement comes as Chinese authorities seek to shore up revenue amid a weakening economy, rising stimulus spending, and diminishing local government income from land sales. According to Bloomberg calculations based on official data, China’s budget gap in the first four months of 2025 soared by more than 50 per cent year-on-year to over $360 billion—a record for the period. Total income in the central government’s two main fiscal accounts fell by 1.3 per cent from a year earlier, while expenditures surged by 7.2 per cent, exacerbating the deficit. Beijing’s stimulus measures, aimed at mitigating the impact of US tariffs and reviving domestic confidence, have increased pressure on the public coffers. Tax bureaus in cities such as Beijing and Shanghai, as well as provinces including Zhejiang, have issued public advisories urging residents to review and report their offshore income before the June 30 deadline for 2024 income declarations. According to Bloomberg, notices issued by the local governments show that they began coordinating enforcement efforts as early as March, after big data analysis revealed a number of residents had not reported overseas gains. In some cases publicised by tax authorities, individuals were asked to pay back overdue tax and penalties amounting to just over 127,000 yuan ($17,720), underscoring how enforcement is now reaching middle-income earners. Data sharing and the global tax net China’s latest tax push builds on its adoption of the Common Reporting Standard (CRS) in 2018—a global tax information-sharing framework developed by the OECD to combat tax evasion. Through CRS, China automatically receives data from nearly 150 jurisdictions regarding financial accounts held by Chinese residents abroad. While China’s tax laws have long mandated that residents declare and pay tax on worldwide income, enforcement had been lax until recent years. The shift coincides with President Xi Jinping’s “common prosperity” campaign, aimed at narrowing wealth gaps and increasing redistribution in the country. Amid domestic uncertainty, more Chinese investors have sought to move wealth abroad. Bloomberg data shows that mainland investors have funnelled over HK$658 billion ($83.9 billion) into Hong Kong-listed stocks via the cross-border trading link this year—more than double the outflows during the same period in 2024. Bloomberg Intelligence forecasts that personal investable assets in mainland China could soar to $80 trillion by 2030, with overseas investments rising to 11 per cent of household investable wealth, up from 8 per cent in 2023. As Beijing broadens its tax net and enhances surveillance of offshore wealth, analysts say middle-class Chinese investors with modest foreign holdings are increasingly likely to come under scrutiny. With the deadline looming and enforcement ramping up, the message from Chinese tax authorities is clear: no overseas income is too small to escape attention.

The broadened crackdown is part of Beijing’s attempt to boost fiscal revenue amid record budget deficits and economic headwinds.

China widens tax crackdown to middle-class overseas investors

The UK's Office for National Statistics (ONS) has admitted that the annual inflation rate for April was overstated due to a data error stemming from a government department. The ONS announced on June 5 that the actual consumer price inflation for the 12 months to April 2025 was 3.4 per cent, not the initially reported 3.5 per cent.The discrepancy arose from an error in tax data provided by the Department for Transport (DfT), specifically related to Vehicle Excise Duty (VED). The faulty figures incorrectly inflated the number of newly registered vehicles subject to first-year VED rates, mistakenly pushing up the index used to calculate inflation.“This issue was isolated to the Vehicle Excise Duty component of consumer price inflation,” the ONS said in a statement. “The error overstated the number of vehicles subject to higher VED rates, thereby marginally inflating both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) by 0.1 percentage points.”<h2>ONS faces further scrutiny over data integrity</h2>The ONS clarified that no other time periods or inflation statistics have been impacted, and it will not revise April’s official CPI figures retroactively. However, corrected and properly weighted data will be used starting with the release of May’s inflation figures, scheduled for June 18.This latest data slip comes at a sensitive time for the statistics body, which is already under pressure following recent criticisms over the accuracy of its labour market figures.In April, the UK government initiated a formal investigation into the reliability and effectiveness of the ONS’s published economic data, raising broader concerns about the robustness of official statistical reporting.“The ONS is reviewing its quality assurance processes for external data sources in light of this issue,” the agency said, while stressing that the DfT’s official statistics remain unaffected.Despite the relatively minor scale of the revision, the correction underscores the significant impact that even small data errors can have on headline economic indicators. Analysts note that inflation data feeds directly into interest rate decisions and public sentiment about the economy, making statistical accuracy critical.All eyes will now be on the May inflation release to ensure that corrected methodologies yield more reliable results.

Faulty vehicle tax data pushed inflation 0.1 percentage points higher.

The UK's Office for National Statistics (ONS) has admitted that the annual inflation rate for April was overstated due to a data error stemming from a government department. The ONS announced on June 5 that the actual consumer price inflation for the 12 months to April 2025 was 3.4 per cent, not the initially reported 3.5 per cent. The discrepancy arose from an error in tax data provided by the Department for Transport (DfT), specifically related to Vehicle Excise Duty (VED). The faulty figures incorrectly inflated the number of newly registered vehicles subject to first-year VED rates, mistakenly pushing up the index used to calculate inflation. “This issue was isolated to the Vehicle Excise Duty component of consumer price inflation,” the ONS said in a statement. “The error overstated the number of vehicles subject to higher VED rates, thereby marginally inflating both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) by 0.1 percentage points.” ONS faces further scrutiny over data integrity The ONS clarified that no other time periods or inflation statistics have been impacted, and it will not revise April’s official CPI figures retroactively. However, corrected and properly weighted data will be used starting with the release of May’s inflation figures, scheduled for June 18. This latest data slip comes at a sensitive time for the statistics body, which is already under pressure following recent criticisms over the accuracy of its labour market figures. In April, the UK government initiated a formal investigation into the reliability and effectiveness of the ONS’s published economic data, raising broader concerns about the robustness of official statistical reporting. “The ONS is reviewing its quality assurance processes for external data sources in light of this issue,” the agency said, while stressing that the DfT’s official statistics remain unaffected. Despite the relatively minor scale of the revision, the correction underscores the significant impact that even small data errors can have on headline economic indicators. Analysts note that inflation data feeds directly into interest rate decisions and public sentiment about the economy, making statistical accuracy critical. All eyes will now be on the May inflation release to ensure that corrected methodologies yield more reliable results.

Faulty vehicle tax data pushed inflation 0.1 percentage points higher

UK inflation for April overstated due to data error, statistics department says

Tech billionaire Elon Musk has intensified his public opposition to Donald Trump’s flagship tax and spending bill, calling on Americans to demand that lawmakers reject the legislation.&nbsp;&nbsp;In a forceful social media post on Wednesday, Musk urged voters to “KILL the BILL,” accusing the president of pushing through a fiscally irresponsible agenda.

<blockquote class="twitter-tweet">Call your Senator, Call your Congressman, Bankrupting America is NOT ok! KILL the BILL&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1930336497208832059?ref_src=twsrc%5Etfw">June 4, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

“Call your Senator, Call your Congressman. Bankrupting America is NOT ok! KILL the BILL,” Musk posted on X, formerly Twitter, to his 220 million followers.<h2> Musk’s June 4 rebuttal&nbsp;</h2>This latest post is part of Musk’s escalating campaign against what Trump calls his “One, Big, Beautiful Bill.”&nbsp; &nbsp;Musk’s opposition began earlier this week, with a flurry of posts on June 4 describing the legislation as a “disgusting abomination” that could plunge the United States into what he calls “debt slavery.”&nbsp;&nbsp;He had warned that the bill would “massively increase the already gigantic budget deficit to $2.5 trillion” and accused lawmakers of betraying fiscal conservatism.&nbsp;“I just can’t stand it anymore,” Musk wrote on June 4. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong.” In another widely shared post, he mocked the bill by sharing a parody movie poster of “Kill Bill” and said, “A bill can be big or it can be beautiful, but I don’t know if it can be both.”<h2>Musk's shifting stance</h2>Musk’s criticism is not merely rhetorical. The timing of his public outburst is significant. Just days earlier, he officially stepped down as head of the Department of Government Efficiency — or DOGE — a short-term post he held in the Trump administration. His appointment was meant to symbolize a drive to rein in federal spending. But his sudden exit and immediate condemnation of Trump’s economic agenda suggest deep internal disagreements. &nbsp;The bill, which has already passed the House and is now under Senate review, combines major tax cuts, a sharp increase in the federal debt ceiling, and sweeping cuts to federal programs — including clean energy subsidies that benefit Musk’s electric vehicle company Tesla.&nbsp;&nbsp;Musk has called for a complete overhaul of the legislation. “A new spending bill should be drafted that doesn’t massively grow the deficit and increase the debt ceiling by five trillion dollars,” he wrote on X.&nbsp;On the same day Musk renewed his attack, the nonpartisan Congressional Budget Office released a troubling analysis of the bill’s financial impact. According to the CBO, the legislation would add $2.4 trillion to the federal deficit over the next decade.&nbsp;&nbsp;The office projected a $3.67 trillion drop in government revenue and only a $1.25 trillion decrease in federal spending through 2034. The report does not factor in any potential economic growth that could offset the losses — a key justification cited by the bill’s supporters.&nbsp;Despite Musk’s repeated attacks, the Trump camp appears undeterred. The former president has continued to tout the bill as a landmark achievement. “Passing THE ONE, BIG, BEAUTIFUL BILL is a Historic Opportunity to turn our Country around,” Trump posted recently.&nbsp;&nbsp;White House Press Secretary Karoline Leavitt dismissed Musk’s criticism, saying, “The President already knows where Elon Musk stood on this bill. It doesn’t change the president’s opinion. This is one big, beautiful bill and he’s sticking to it.”&nbsp;Musk’s public break with Trump marks a dramatic shift in their relationship. During his four-month stint in government, Musk had maintained a close and visible association with the administration. But behind the scenes, sources say tensions had been mounting.&nbsp;&nbsp;According to NBC News and Axios, the Trump White House rejected multiple proposals from Musk — including his suggestion to let the Federal Aviation Administration manage Starlink and his preferred candidate to head NASA.&nbsp;&nbsp;The administration also reportedly denied his request to extend his tenure beyond the 130-day legal limit for special government employees. Musk officially confirmed his departure on May 29, writing, “As my scheduled time as a Special Government Employee comes to an end, I would like to thank President Trump for the opportunity to reduce wasteful spending.”&nbsp; Trump hosted a farewell event at the White House the next day, publicly praising Musk’s efforts. However, just days later, Musk’s tone turned sharply critical, suggesting that the parting was not entirely amicable. Tesla’s business interests may also be a factor in Musk’s political stance. The bill proposes major rollbacks to Biden-era clean energy and electric vehicle incentives, which have directly benefited Tesla.&nbsp; Musk’s tenure in government had already coincided with a dip in Tesla EV sales — a trend that analysts partly attribute to his alignment with a deeply polarizing administration. Speaking at the Qatar Economic Forum on May 20, Musk signalled his intent to reduce his political visibility, saying, “I’m going to do a lot less in the future,” as quoted by Reuters.&nbsp; For now, however, he appears to be fully engaged in the political fight — positioning himself not just as a business leader, but as a fiscal hawk willing to take on the very administration he once served.&nbsp; Whether his campaign will succeed in derailing the legislation remains to be seen, but one thing is certain: Elon Musk is no longer pulling his punches.&nbsp;

This latest post is part of Musk’s escalating campaign against what Trump calls his “One, Big, Beautiful Bill.

Tech billionaire Elon Musk has intensified his public opposition to Donald Trump’s flagship tax and spending bill, calling on Americans to demand that lawmakers reject the legislation. In a forceful social media post on Wednesday, Musk urged voters to “KILL the BILL,” accusing the president of pushing through a fiscally irresponsible agenda.

Elon Musk publicly opposes Trump's tax and spending bill, urging Americans to reject it.

‘KILL the BILL’: Elon Musk attacks Trump’s tax plan again, warns of ‘debt slavery’

Investors seeking returns and concerned about the impact of US President Trump's trade war drove up gold prices, which had fallen in the first few sessions of June.&nbsp;But the yellow metal made a U-turn on Wednesday as dip-buying and trade talk uncertainty brought investors back into the haven asset. May wasn't a great month for gold as risk assets rallied significantly.<h2>Gold just $200 from a new all-time high</h2>Still, bullion is about 200 dollars away from its all-time high hit in April. The precious metal is up around 28 per cent this year in the multiple record-setting rally. Along with longer-dated bond yields, the rise in the haven asset is a warning shot at the deteriorating economic outlook.&nbsp;True to Wall Street's acronym of 'TACO,' 'Trump always chickens out,' the president has made outsized threats and followed through for a time, only to back off.&nbsp;Still, the one bet that has traders worried is the impact of such uncertainty on the real economy. Central bank buying spree is keeping gold well bid amidst changing geopolitical dynamics.&nbsp;More importantly, no one expects central banks to halt their massive purchases of gold. The buying spree by central banks has become a key factor in the record-breaking bull run in gold.&nbsp;Goldman Sachs researchers believe that central banks and sovereign wealth funds are amassing nearly 80 metric tons of gold every month on a global scale. That at current prices would be worth around 8.5 billion dollars.&nbsp;Trade data suggests that China and other unnamed purchasers via Switzerland account for a lot of the purchases, but much of the buying is done in secret.&nbsp;The World Gold Council reports that central banks and sovereign wealth funds have been purchasing 1,000 tons of gold per annum, which is equivalent to at least 25 per cent of the annual mined production.In January, HSBC surveyed 72 central banks, and almost a third of them intended to increase their purchases in 2025. None intended to sell.&nbsp;Goldman Sachs maintains its 3,700 dollars per ounce end-of-year prediction. On Wednesday, gold was trading at around 3,360 dollars, not far from its all-time peak of over 3,500 dollars in April.&nbsp;(With inputs from the agencies) &nbsp;

Bullion continues to surge, nearly $200 from its April peak, fueled by strong central bank purchases amid economic uncertainty.

Investors seeking returns and concerned about the impact of US President Trump's trade war drove up gold prices, which had fallen in the first few sessions of June. But the yellow metal made a U-turn on Wednesday as dip-buying and trade talk uncertainty brought investors back into the haven asset. May wasn't a great month for gold as risk assets rallied significantly. Gold just $200 from a new all-time high Still, bullion is about 200 dollars away from its all-time high hit in April. The precious metal is up around 28 per cent this year in the multiple record-setting rally. Along with longer-dated bond yields, the rise in the haven asset is a warning shot at the deteriorating economic outlook. True to Wall Street's acronym of 'TACO,' 'Trump always chickens out,' the president has made outsized threats and followed through for a time, only to back off. Still, the one bet that has traders worried is the impact of such uncertainty on the real economy. Central bank buying spree is keeping gold well bid amidst changing geopolitical dynamics. More importantly, no one expects central banks to halt their massive purchases of gold. The buying spree by central banks has become a key factor in the record-breaking bull run in gold. Goldman Sachs researchers believe that central banks and sovereign wealth funds are amassing nearly 80 metric tons of gold every month on a global scale. That at current prices would be worth around 8.5 billion dollars. Trade data suggests that China and other unnamed purchasers via Switzerland account for a lot of the purchases, but much of the buying is done in secret. The World Gold Council reports that central banks and sovereign wealth funds have been purchasing 1,000 tons of gold per annum, which is equivalent to at least 25 per cent of the annual mined production. In January, HSBC surveyed 72 central banks, and almost a third of them intended to increase their purchases in 2025. None intended to sell. Goldman Sachs maintains its 3,700 dollars per ounce end-of-year prediction. On Wednesday, gold was trading at around 3,360 dollars, not far from its all-time peak of over 3,500 dollars in April. (With inputs from the agencies)

Investor concern over Trump's trade war elevated gold prices after initial declines in June.

Gold does a U-turn despite the stock rally

Chinese fast-fashion powerhouse Shein is under intensifying global scrutiny, with European consumer watchdogs accusing it of manipulating online shoppers through unethical design tactics, while new tariff policies in the US threaten its cost-driven model.&nbsp;&nbsp;The pan-European Consumer Organization BEUC has now formally lodged a complaint with EU authorities, alleging that Shein uses “dark patterns” to pressure users into overspending. a move that may further destabilise the retail giant, already hit by regulatory and trade headwinds.<h2>BEUC files formal complaint over ‘manipulative’ sales tactics</h2>In a 29-page dossier submitted to the European Commission, BEUC,&nbsp;which represents consumer organisations in 21 countries,&nbsp;has detailed what it calls a widespread use of “dark patterns” on Shein’s platform. These include fake countdown timers, low-stock alerts, forced sign-ups, and “confirm shaming,” a practice that induces guilt in consumers who opt not to buy a product.&nbsp;According to BEUC, these tactics constitute “unfair commercial practice” that misleads consumers into overconsumption and undermines environmental sustainability. In its statement quoted by Reuters, BEUC urged regulators to force Shein to provide data behind its claims, such as “only 2 left in stock” or ongoing flash sales. If the company cannot provide such evidence, the watchdog says Shein must immediately stop these marketing ploys across the EU.&nbsp;“Shein’s practices are driving consumers to fill their wardrobes with clothes they barely use — often made with harmful chemicals — thereby worsening the social and environmental costs of fast fashion,” BEUC said in its complaint.&nbsp;Shein responded by criticising the consumer group’s unwillingness to engage in dialogue, calling it “extremely disappointing” given the brand’s popularity across Europe.<h2>Past EU crackdown on Shein&nbsp;</h2>This is not Shein’s first clash with European authorities. On 27 May, the European Commission and national regulators from Belgium, France, Ireland, and the Netherlands issued a stern warning to the company, citing breaches of EU law related to fake discounts, pressure selling, and deceptive product labels.&nbsp;As per Reuters, the investigation found that Shein routinely inflated original prices to exaggerate the value of discounts. It also accused the company of falsely advertising products as sustainable without verified environmental credentials — misleading shoppers trying to make conscious choices.Shein was also found to be obstructing customer support access and providing unclear information about return and refund processes, in violation of core EU consumer rights.&nbsp;&nbsp;The Commission has given Shein until 26 June to respond and propose corrective actions. Failing this, it could face fines proportionate to its annual turnover within the EU.<h2>Digital dominance under threat</h2>Shein’s sprawling presence in the EU, with nearly 100 million monthly users, according to figures cited by Business Insider,&nbsp;places it firmly in the crosshairs of European regulators. The company is also under watch under the EU’s new Digital Services Act (DSA), which imposes strict compliance measures on very large online platforms.&nbsp;Adding to its challenges, the EU is preparing a €2 handling fee per parcel on low-value e-commerce shipments — a move widely seen as targeting high-volume, low-margin sellers like Shein, as per Reuters.<h2>Trump-era tariffs and new US rules deepen the crisis</h2>Regulatory woes aren’t confined to Europe. In April, Shein announced price hikes, blaming changes in global trade regulations and tariffs. The move came shortly after US President Donald Trump reimposed stiff tariffs on low-cost imports and closed the so-called de minimis loophole,&nbsp;which had allowed goods valued under $800 to enter the US duty-free.&nbsp;As reported by Business Insider, this change directly affects Shein’s business model, which thrives on shipping low-cost individual parcels from China directly to US consumers.&nbsp;&nbsp;The policy reversal is expected to dent Shein’s profit margins, increase shipping costs, and slow down order fulfilment,&nbsp;making it harder to maintain the ultra-fast, ultra-cheap appeal that built its global empire.<h2>What lies ahead?</h2>With the EU deadline of 26 June fast approaching and heightened trade scrutiny in the US, Shein is under pressure to prove that it can adapt. EU authorities have made it clear: unless the company offers meaningful reforms, enforcement actions will follow,&nbsp;including steep financial penalties.&nbsp;According to Reuters, national regulators have the mandate to take legal steps if Shein's response fails to satisfy consumer law requirements.&nbsp;As Shein walks a regulatory tightrope across continents, its future may depend on more than just trendy clothing and flash sales. Its ability to survive this growing storm will now hinge on transparency, reform, and cooperation with the very markets that powered its rise.&nbsp;&nbsp;(With inputs from the agencies)&nbsp;

This is not Shein first clash with European authorities. On 27 May, the European Commission issued a stern warning to the company, citing breaches of EU law related to fake discounts, pressure selling, and deceptive product labels.

Chinese fast-fashion powerhouse Shein is under intensifying global scrutiny, with European consumer watchdogs accusing it of manipulating online shoppers through unethical design tactics, while new tariff policies in the US threaten its cost-driven model. The pan-European Consumer Organization BEUC has now formally lodged a complaint with EU authorities, alleging that Shein uses “dark patterns” to pressure users into overspending. a move that may further destabilise the retail giant, already hit by regulatory and trade headwinds. BEUC files formal complaint over ‘manipulative’ sales tactics In a 29-page dossier submitted to the European Commission, BEUC, which represents consumer organisations in 21 countries, has detailed what it calls a widespread use of “dark patterns” on Shein’s platform. These include fake countdown timers, low-stock alerts, forced sign-ups, and “confirm shaming,” a practice that induces guilt in consumers who opt not to buy a product. According to BEUC, these tactics constitute “unfair commercial practice” that misleads consumers into overconsumption and undermines environmental sustainability. In its statement quoted by Reuters, BEUC urged regulators to force Shein to provide data behind its claims, such as “only 2 left in stock” or ongoing flash sales. If the company cannot provide such evidence, the watchdog says Shein must immediately stop these marketing ploys across the EU. “Shein’s practices are driving consumers to fill their wardrobes with clothes they barely use — often made with harmful chemicals — thereby worsening the social and environmental costs of fast fashion,” BEUC said in its complaint. Shein responded by criticising the consumer group’s unwillingness to engage in dialogue, calling it “extremely disappointing” given the brand’s popularity across Europe. Past EU crackdown on Shein This is not Shein’s first clash with European authorities. On 27 May, the European Commission and national regulators from Belgium, France, Ireland, and the Netherlands issued a stern warning to the company, citing breaches of EU law related to fake discounts, pressure selling, and deceptive product labels. As per Reuters, the investigation found that Shein routinely inflated original prices to exaggerate the value of discounts. It also accused the company of falsely advertising products as sustainable without verified environmental credentials — misleading shoppers trying to make conscious choices. Shein was also found to be obstructing customer support access and providing unclear information about return and refund processes, in violation of core EU consumer rights. The Commission has given Shein until 26 June to respond and propose corrective actions. Failing this, it could face fines proportionate to its annual turnover within the EU. Digital dominance under threat Shein’s sprawling presence in the EU, with nearly 100 million monthly users, according to figures cited by Business Insider, places it firmly in the crosshairs of European regulators. The company is also under watch under the EU’s new Digital Services Act (DSA), which imposes strict compliance measures on very large online platforms. Adding to its challenges, the EU is preparing a €2 handling fee per parcel on low-value e-commerce shipments — a move widely seen as targeting high-volume, low-margin sellers like Shein, as per Reuters. Trump-era tariffs and new US rules deepen the crisis Regulatory woes aren’t confined to Europe. In April, Shein announced price hikes, blaming changes in global trade regulations and tariffs. The move came shortly after US President Donald Trump reimposed stiff tariffs on low-cost imports and closed the so-called de minimis loophole, which had allowed goods valued under $800 to enter the US duty-free. As reported by Business Insider, this change directly affects Shein’s business model, which thrives on shipping low-cost individual parcels from China directly to US consumers. The policy reversal is expected to dent Shein’s profit margins, increase shipping costs, and slow down order fulfilment, making it harder to maintain the ultra-fast, ultra-cheap appeal that built its global empire. What lies ahead? With the EU deadline of 26 June fast approaching and heightened trade scrutiny in the US, Shein is under pressure to prove that it can adapt. EU authorities have made it clear: unless the company offers meaningful reforms, enforcement actions will follow, including steep financial penalties. According to Reuters, national regulators have the mandate to take legal steps if Shein's response fails to satisfy consumer law requirements. As Shein walks a regulatory tightrope across continents, its future may depend on more than just trendy clothing and flash sales. Its ability to survive this growing storm will now hinge on transparency, reform, and cooperation with the very markets that powered its rise. (With inputs from the agencies)

European consumer watchdogs have officially complained to EU authorities about Shein, the Chinese fast-fashion giant, allegedly using unethical design practices to manipulate online shoppers.&nbsp;

Shein under EU fire as consumer watchdog slams ‘dark pattern’ sales tactics

The US services sector regained momentum in May, expanding at a faster pace and defying expectations of a prolonged slowdown, even as tariffs and supply delays continued to exert upward pressure on costs.&nbsp;&nbsp;According to S&amp;P Global’s latest Purchasing Managers’ Index (PMI) data, the Services PMI rose to 53.7 in May from April’s 50.8, comfortably above the 50-mark that separates growth from contraction marked the 28th consecutive month of expansion. The reading also surpassed the preliminary 'flash' estimate of 52.3.&nbsp;The uptick was driven by concurrent increases in business activity and new orders, as firms benefited from a more stable domestic demand environment. However, foreign demand remained subdued for a second straight month amid ongoing global trade uncertainties, particularly around tariffs.<h2>Tariffs drive up costs, but optimism rebounds</h2>While service firms added staff to handle growing workloads, the rise in employment wasn’t sufficient to clear backlogs, which grew at the fastest pace since last November. Tariffs-linked equipment delivery delays were cited as a key factor behind rising work outstanding.&nbsp;Tariffs also contributed to a sharp rise in input cost inflation, which surged to its highest level since June 2023. Businesses faced steeper wage bills and elevated supplier prices, forcing many to pass on the costs to clients. As a result, output charge inflation hit its steepest level since August 2022.&nbsp;Chris Williamson, Chief Business Economist at S&amp;P Global Market Intelligence, noted that while the service sector is showing signs of recovery, inflationary pressures remain a critical concern. “These rising price pressures will only add to policymaker reluctance to reduce interest rates, which we consequently expect to remain on hold until December,” he said.&nbsp;Despite the cost burdens, business confidence improved in May, buoyed by tariff pauses and expectations of a more predictable policy environment. Optimism about the year ahead reached a four-month high, though it still lags behind historical averages. Companies are planning increased marketing and facility expansion as part of their growth outlook.<h2>Composite outlook mixed amid manufacturing weakness</h2>The broader US economy saw a modest improvement in May, with the S&amp;P Global Composite PMI rising to 53.0 from 50.6 in April. However, the services-led rebound masked continued struggles in the manufacturing sector, which contracted for the third consecutive month.&nbsp;The ISM’s separate manufacturing PMI fell to 48.5 in May, its lowest in six months, reflecting persistent weakness. Factories reported declining new orders, worsening supply chain bottlenecks, and ongoing job losses.&nbsp;&nbsp;The effects of tariffs were also evident, with slower deliveries and falling import volumes signaling pressure on the goods-producing sector.&nbsp;Economists warn that while the US economy is avoiding recession for now, growth remains fragile. “The PMI is so far indicating annualized GDP growth barely above 1 per cent in the second quarter,” Williamson said, forecasting modest 1.3 per cent growth for 2025.&nbsp;With inflationary risks rising and manufacturing under strain, the Federal Reserve is expected to hold rates steady through year-end as it monitors evolving macroeconomic dynamics.

The uptick was driven by concurrent increases in business activity and new orders, as firms benefited from a more stable domestic demand environment.

The US services sector regained momentum in May, expanding at a faster pace and defying expectations of a prolonged slowdown, even as tariffs and supply delays continued to exert upward pressure on costs. According to S&P Global’s latest Purchasing Managers’ Index (PMI) data, the Services PMI rose to 53.7 in May from April’s 50.8, comfortably above the 50-mark that separates growth from contraction marked the 28th consecutive month of expansion. The reading also surpassed the preliminary 'flash' estimate of 52.3. The uptick was driven by concurrent increases in business activity and new orders, as firms benefited from a more stable domestic demand environment. However, foreign demand remained subdued for a second straight month amid ongoing global trade uncertainties, particularly around tariffs. Tariffs drive up costs, but optimism rebounds While service firms added staff to handle growing workloads, the rise in employment wasn’t sufficient to clear backlogs, which grew at the fastest pace since last November. Tariffs-linked equipment delivery delays were cited as a key factor behind rising work outstanding. Tariffs also contributed to a sharp rise in input cost inflation, which surged to its highest level since June 2023. Businesses faced steeper wage bills and elevated supplier prices, forcing many to pass on the costs to clients. As a result, output charge inflation hit its steepest level since August 2022. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that while the service sector is showing signs of recovery, inflationary pressures remain a critical concern. “These rising price pressures will only add to policymaker reluctance to reduce interest rates, which we consequently expect to remain on hold until December,” he said. Despite the cost burdens, business confidence improved in May, buoyed by tariff pauses and expectations of a more predictable policy environment. Optimism about the year ahead reached a four-month high, though it still lags behind historical averages. Companies are planning increased marketing and facility expansion as part of their growth outlook. Composite outlook mixed amid manufacturing weakness The broader US economy saw a modest improvement in May, with the S&P Global Composite PMI rising to 53.0 from 50.6 in April. However, the services-led rebound masked continued struggles in the manufacturing sector, which contracted for the third consecutive month. The ISM’s separate manufacturing PMI fell to 48.5 in May, its lowest in six months, reflecting persistent weakness. Factories reported declining new orders, worsening supply chain bottlenecks, and ongoing job losses. The effects of tariffs were also evident, with slower deliveries and falling import volumes signaling pressure on the goods-producing sector. Economists warn that while the US economy is avoiding recession for now, growth remains fragile. “The PMI is so far indicating annualized GDP growth barely above 1 per cent in the second quarter,” Williamson said, forecasting modest 1.3 per cent growth for 2025. With inflationary risks rising and manufacturing under strain, the Federal Reserve is expected to hold rates steady through year-end as it monitors evolving macroeconomic dynamics.

The uptick was driven by concurrent increases in business activity and new orders, as firms benefited from a more stable domestic demand environment.

US service sector rebounds, but inflation fears clouds outlook

In a move that risks reigniting global trade tensions, Canada is preparing retaliatory measures in response to the United States doubling tariffs on steel and aluminium imports.&nbsp;&nbsp;Meanwhile, the European Union is attempting to make diplomatic headway with Washington, even as European industry reels from the fallout. The developments come as US President Donald Trump’s administration ramps up pressure on trade partners, asking for “best offers” to avoid broader tariff escalations in July.<h2>Canada hits back&nbsp;</h2>Canada, one of the United States’ top trading partners, is facing the brunt of Trump’s tariff hike. According to US Census Bureau data, Canada exports more aluminium to the US than the rest of the top 10 suppliers combined, making it particularly vulnerable to the new levies.&nbsp;The revised tariffs, which came into effect on June 4, raise duties on steel and aluminium imports from 25 per cent to 50 per cent.&nbsp;In a statement cited by Reuters, Canadian Prime Minister Mark Carney’s office said the country was “engaged in intensive and live negotiations to have these and other tariffs removed.” But the government is also preparing reciprocal measures should the talks fail to yield results.&nbsp;The impact of these tariffs is already being felt. Austrian steelmaker Voestalpine warned that the new duties could hit its earnings, while German steel lobby group WSM expressed concern that EU suppliers might be squeezed out of US markets altogether. “Nobody has the margins to absorb these bottomless tariffs,” WSM Managing Director Christian Vietmeyer told Reuters.<h2>EU optimistic but concerned over steel tariffs</h2>Despite rising tensions, the European Union remains cautiously optimistic about trade talks with the US. On Wednesday, EU trade commissioner Maros Sefcovic met with US Trade Representative Jamieson Greer in Paris and reported “concrete progress” in negotiations, as per Reuters.&nbsp;“We both concluded that we are advancing in the right direction, at pace,” Sefcovic told Reuters, adding that high-level talks will follow ongoing technical discussions in Washington. However, he also criticised the tariff hike, saying it does not contribute positively to the dialogue.&nbsp;Sefcovic said the EU and US share a common challenge of steel overcapacity and should be working together rather than implementing unilateral measures. European businesses have echoed this sentiment, calling on the EU to do everything in its power to resolve what they describe as a customs conflict.&nbsp;&nbsp;The EU has not yet received a formal letter from the US requesting specific proposals, unlike other trading partners.<h2>Trump doubles down on metal tariffs&nbsp;</h2>President Trump signed an executive proclamation on Wednesday, doubling existing tariffs on steel and aluminium imports from 25 per cent to 50 per cent. The new rate applies to nearly all trading partners except the United Kingdom, which has reached a preliminary trade deal with Washington during the ongoing 90-day pause on broader Trump tariffs.&nbsp;The White House expects countries to submit their “best offers” across various sectors, including quotas and tariff proposals for US exports, by early July to avoid further retaliatory measures.&nbsp;&nbsp;According to a Reuters report, Washington has promised to respond “within days” with details of possible exemptions or reductions if satisfactory offers are made.&nbsp;British Prime Minister Keir Starmer expressed confidence that tariffs on UK steel would be reduced to zero within a few weeks, suggesting that negotiations between London and Washington are progressing well.<h2>Industry fallout spreads</h2>The tariff shock is already rippling through global supply chains. French spirits group Rémy Cointreau reportedly abandoned its 2030 sales growth targets, citing US tariffs, slower American sales, and overall economic uncertainty as key factors.&nbsp;In the metals sector, aluminium price premiums have surged as markets brace for reduced supply and continued demand. With limited domestic production capacity, the US is likely to maintain current import volumes unless prices spike enough to suppress consumption.Meanwhile, Mexico’s Economy Minister Marcelo Ebrard criticised the new duties, calling them “unsustainable and unfair,” particularly since Mexico imports more steel from the US than it exports there.&nbsp;Beyond metals, trade friction with China is also complicating matters. Auto manufacturers in the US and Europe are facing potential production slowdowns due to China’s export restrictions on rare earth magnets and minerals, which are vital for electric vehicles and other components.&nbsp;As Reuters reported, both German and US firms are warning of supply chain disruptions due to the Chinese curbs, which many see as retaliation for Trump’s tariffs.<h2>What lies ahead</h2>With the July 8 deadline approaching for Trump’s “reciprocal” tariffs to take effect, the global trade landscape remains volatile. Canada’s pushback, EU’s cautious optimism, and industry-wide uncertainty underscore the stakes involved.&nbsp;&nbsp;As negotiations intensify, the world will be watching to see whether diplomacy can prevail or whether another full-scale trade war is on the horizon.&nbsp;

The revised tariffs, which came into effect on June 4, raise duties on steel and aluminium imports from 25% to 50%. 

In a move that risks reigniting global trade tensions, Canada is preparing retaliatory measures in response to the United States doubling tariffs on steel and aluminium imports. Meanwhile, the European Union is attempting to make diplomatic headway with Washington, even as European industry reels from the fallout. The developments come as US President Donald Trump’s administration ramps up pressure on trade partners, asking for “best offers” to avoid broader tariff escalations in July. Canada hits back Canada, one of the United States’ top trading partners, is facing the brunt of Trump’s tariff hike. According to US Census Bureau data, Canada exports more aluminium to the US than the rest of the top 10 suppliers combined, making it particularly vulnerable to the new levies. The revised tariffs, which came into effect on June 4, raise duties on steel and aluminium imports from 25 per cent to 50 per cent. In a statement cited by Reuters, Canadian Prime Minister Mark Carney’s office said the country was “engaged in intensive and live negotiations to have these and other tariffs removed.” But the government is also preparing reciprocal measures should the talks fail to yield results. The impact of these tariffs is already being felt. Austrian steelmaker Voestalpine warned that the new duties could hit its earnings, while German steel lobby group WSM expressed concern that EU suppliers might be squeezed out of US markets altogether. “Nobody has the margins to absorb these bottomless tariffs,” WSM Managing Director Christian Vietmeyer told Reuters. EU optimistic but concerned over steel tariffs Despite rising tensions, the European Union remains cautiously optimistic about trade talks with the US. On Wednesday, EU trade commissioner Maros Sefcovic met with US Trade Representative Jamieson Greer in Paris and reported “concrete progress” in negotiations, as per Reuters. “We both concluded that we are advancing in the right direction, at pace,” Sefcovic told Reuters, adding that high-level talks will follow ongoing technical discussions in Washington. However, he also criticised the tariff hike, saying it does not contribute positively to the dialogue. Sefcovic said the EU and US share a common challenge of steel overcapacity and should be working together rather than implementing unilateral measures. European businesses have echoed this sentiment, calling on the EU to do everything in its power to resolve what they describe as a customs conflict. The EU has not yet received a formal letter from the US requesting specific proposals, unlike other trading partners. Trump doubles down on metal tariffs President Trump signed an executive proclamation on Wednesday, doubling existing tariffs on steel and aluminium imports from 25 per cent to 50 per cent. The new rate applies to nearly all trading partners except the United Kingdom, which has reached a preliminary trade deal with Washington during the ongoing 90-day pause on broader Trump tariffs. The White House expects countries to submit their “best offers” across various sectors, including quotas and tariff proposals for US exports, by early July to avoid further retaliatory measures. According to a Reuters report, Washington has promised to respond “within days” with details of possible exemptions or reductions if satisfactory offers are made. British Prime Minister Keir Starmer expressed confidence that tariffs on UK steel would be reduced to zero within a few weeks, suggesting that negotiations between London and Washington are progressing well. Industry fallout spreads The tariff shock is already rippling through global supply chains. French spirits group Rémy Cointreau reportedly abandoned its 2030 sales growth targets, citing US tariffs, slower American sales, and overall economic uncertainty as key factors. In the metals sector, aluminium price premiums have surged as markets brace for reduced supply and continued demand. With limited domestic production capacity, the US is likely to maintain current import volumes unless prices spike enough to suppress consumption. Meanwhile, Mexico’s Economy Minister Marcelo Ebrard criticised the new duties, calling them “unsustainable and unfair,” particularly since Mexico imports more steel from the US than it exports there. Beyond metals, trade friction with China is also complicating matters. Auto manufacturers in the US and Europe are facing potential production slowdowns due to China’s export restrictions on rare earth magnets and minerals, which are vital for electric vehicles and other components. As Reuters reported, both German and US firms are warning of supply chain disruptions due to the Chinese curbs, which many see as retaliation for Trump’s tariffs. What lies ahead With the July 8 deadline approaching for Trump’s “reciprocal” tariffs to take effect, the global trade landscape remains volatile. Canada’s pushback, EU’s cautious optimism, and industry-wide uncertainty underscore the stakes involved. As negotiations intensify, the world will be watching to see whether diplomacy can prevail or whether another full-scale trade war is on the horizon.

Canada, one of the US' top trading partners, exports more aluminum to the US than the rest of the top 10 suppliers combined, making it particularly vulnerable to the new levies.&nbsp;

Canada threatens retaliation as Trump doubles metal tariffs; EU pushes for trade breakthrough

China’s services sector expanded modestly in May, demonstrating resilience amid growing external trade pressures that has weighed heavily on the country’s manufacturing activity.&nbsp;The Caixin China General Services Business Activity Index rose to 51.1 in May from 50.7 in April, according to data released on June 5. This marks the 29th consecutive month of expansion in services activity, as companies reported improved domestic demand and a slight recovery in employment.While the uptick was modest, it stood in stark contrast to the manufacturing sector, where activity contracted at its fastest pace since September 2022. The manufacturing PMI slumped to 48.3 in May, down from 50.4 in April, pulled lower by a significant decline in export orders, largely attributed to rising US tariffs on Chinese goods.<h2>Services gain ground despite global headwinds</h2>The services sector’s steady growth was underpinned by faster increases in new business, supported by efforts to broaden client bases and enhance outreach. Although new export orders fell for the first time in 2025, reflecting global trade frictions and tariff-related uncertainty, domestic demand proved strong enough to sustain expansion.&nbsp;According to panellists, business development efforts and promotional activities played a key role in driving growth.To manage higher workloads, service providers modestly expanded their workforce in May, ending a two-month streak of job cuts. Employment growth, while slight, was the strongest since November 2024. The slower rise in backlogs of work indicated that increased staffing had helped ease pressure on operations.“Both supply and demand grew at a slightly faster clip as businesses sought to acquire new clients,” said Dr. Wang Zhe, Senior Economist at Caixin Insight Group. “Business activity and total new orders both grew for the 29th consecutive month.”Still, cost pressures intensified. Input cost inflation, driven by higher purchase prices and wages, accelerated to its fastest pace in seven months. Yet, in a bid to remain competitive, firms cut selling prices for the fourth consecutive month. The rate of discounting was the sharpest in eight months, as companies attempted to attract business in a challenging external environment.<h2>Tariff strain dents growth</h2>China’s overall economic momentum took a hit in May as the composite Caixin PMI which combines both manufacturing and services, fell to 49.6 from 51.1 in April. This marked the first contraction in overall activity since December 2022.Manufacturing bore the brunt of the slowdown. The sector’s decline was driven by falling new orders, weakening export demand, and job cuts. The employment index for factories slipped for the second straight month. Inventory build-up at production sites also pointed to weakening domestic and international demand.“The contraction in manufacturing weighed on the overall market,” Dr. Wang noted. “New export orders remained sluggish in both the manufacturing and services sectors. Uncertainty in the external trade environment has increased, adding to domestic economic headwinds.”The impact of US tariffs was particularly visible in May, with the export orders index falling to its lowest level since July 2023. Despite a temporary 90-day pause in tariffs agreed between Beijing and Washington, investor sentiment remains fragile amid fears of prolonged trade tensions.<h2>Policy support and consumer demand key</h2>While overall business confidence improved slightly in May, optimism remains low. Firms are hopeful that easing trade tensions and improved global conditions could support future growth. Analysts suggest that targeted policy support and measures to boost household incomes will be essential to sustaining recovery.“The lasting impact of earlier consumption-stimulating measures needs further evaluation,” Dr. Wang said. “More importantly, boosting domestic demand should be grounded in improving household incomes, employment, and social security.”With manufacturing under strain and global uncertainty lingering, China’s services sector has become a crucial pillar for economic stability in China midway through 2025.

New orders and hiring improve, but export weakness weighs on broader economy.

China’s services sector expanded modestly in May, demonstrating resilience amid growing external trade pressures that has weighed heavily on the country’s manufacturing activity. The Caixin China General Services Business Activity Index rose to 51.1 in May from 50.7 in April, according to data released on June 5. This marks the 29th consecutive month of expansion in services activity, as companies reported improved domestic demand and a slight recovery in employment. While the uptick was modest, it stood in stark contrast to the manufacturing sector, where activity contracted at its fastest pace since September 2022. The manufacturing PMI slumped to 48.3 in May, down from 50.4 in April, pulled lower by a significant decline in export orders, largely attributed to rising US tariffs on Chinese goods. Services gain ground despite global headwinds The services sector’s steady growth was underpinned by faster increases in new business, supported by efforts to broaden client bases and enhance outreach. Although new export orders fell for the first time in 2025, reflecting global trade frictions and tariff-related uncertainty, domestic demand proved strong enough to sustain expansion. According to panellists, business development efforts and promotional activities played a key role in driving growth. To manage higher workloads, service providers modestly expanded their workforce in May, ending a two-month streak of job cuts. Employment growth, while slight, was the strongest since November 2024. The slower rise in backlogs of work indicated that increased staffing had helped ease pressure on operations. “Both supply and demand grew at a slightly faster clip as businesses sought to acquire new clients,” said Dr. Wang Zhe, Senior Economist at Caixin Insight Group. “Business activity and total new orders both grew for the 29th consecutive month.” Still, cost pressures intensified. Input cost inflation, driven by higher purchase prices and wages, accelerated to its fastest pace in seven months. Yet, in a bid to remain competitive, firms cut selling prices for the fourth consecutive month. The rate of discounting was the sharpest in eight months, as companies attempted to attract business in a challenging external environment. Tariff strain dents growth China’s overall economic momentum took a hit in May as the composite Caixin PMI which combines both manufacturing and services, fell to 49.6 from 51.1 in April. This marked the first contraction in overall activity since December 2022. Manufacturing bore the brunt of the slowdown. The sector’s decline was driven by falling new orders, weakening export demand, and job cuts. The employment index for factories slipped for the second straight month. Inventory build-up at production sites also pointed to weakening domestic and international demand. “The contraction in manufacturing weighed on the overall market,” Dr. Wang noted. “New export orders remained sluggish in both the manufacturing and services sectors. Uncertainty in the external trade environment has increased, adding to domestic economic headwinds.” The impact of US tariffs was particularly visible in May, with the export orders index falling to its lowest level since July 2023. Despite a temporary 90-day pause in tariffs agreed between Beijing and Washington, investor sentiment remains fragile amid fears of prolonged trade tensions. Policy support and consumer demand key While overall business confidence improved slightly in May, optimism remains low. Firms are hopeful that easing trade tensions and improved global conditions could support future growth. Analysts suggest that targeted policy support and measures to boost household incomes will be essential to sustaining recovery. “The lasting impact of earlier consumption-stimulating measures needs further evaluation,” Dr. Wang said. “More importantly, boosting domestic demand should be grounded in improving household incomes, employment, and social security.” With manufacturing under strain and global uncertainty lingering, China’s services sector has become a crucial pillar for economic stability in China midway through 2025.

New orders and hiring improve, but export weakness weighs on broader economy.

China’s services sector holds firm in May despite manufacturing drag amid tariff pressure

A leading US vehicle suppliers’ group has sounded the alarm over China’s export restrictions on rare earth elements, warning that the curbs could soon disrupt auto parts production across the country.&nbsp;&nbsp;The group, known as MEMA, the Vehicle Suppliers Association,&nbsp;has called for “immediate and decisive action” from the US government, stressing that the industry is already facing “serious, real-time risks” to its supply chains, according to a statement quoted by Reuters.&nbsp;China, which dominates over 90 per cent of the global processing capacity for rare earths, tightened export restrictions in early April, requiring companies to obtain special licences to ship rare earth minerals and magnets abroad.&nbsp;&nbsp;The move followed the escalation of a US-China trade war triggered by President Donald Trump’s sweeping tariffs on Chinese imports, with Beijing now leveraging its grip on critical mineral supply chains in response.<h2>What are rare earths, and why do they matter?</h2>Rare earth elements are a group of 17 chemically similar metals used extensively in high-tech and green technologies. From electric vehicle motors and automatic transmissions to fighter jets, wind turbines, and smartphones, rare earths are vital to modern manufacturing.&nbsp;&nbsp;They are especially critical in the automotive industry, powering components such as alternators, motors, seatbelt systems, sensors, and cameras.Exporters in China must now submit lengthy applications, sometimes hundreds of pages long,&nbsp;to qualify for export licences. As per a Reuters report, China’s rare-earth magnet exports halved in April amid confusion over the new system, paralysing supply chains that had long depended on Beijing’s stability and efficiency.<h2>US suppliers face mounting pressure</h2>In a joint letter sent on 9 May to the Trump administration, MEMA and the Alliance for Automotive Innovation, representing automakers such as General Motors, Toyota, Volkswagen, and Hyundai,&nbsp;warned that the restrictions could bring the auto sector to a standstill.&nbsp;&nbsp;The letter, first reported by Reuters, said suppliers “will be unable to produce critical automotive components” without reliable access to rare earths.&nbsp;The situation has already disrupted operations. Ford, for instance, shut down production of its Explorer SUV at its Chicago plant for a week in May due to a rare-earth shortage. The White House has not yet responded publicly to the growing pressure from the auto industry, as per Reuters.<h2>European auto giants also feel the strain</h2>The ripple effects are now being felt across Europe. On 4 June, a Reuters report revealed that some auto parts factories in Europe have temporarily suspended output.&nbsp;&nbsp;Mercedes-Benz said it is in discussions with suppliers to build up stockpiles of rare earths, though it has not yet experienced a shortage. BMW confirmed that parts of its supplier network have been affected, even as its own production lines continue operating normally, according to a Reuters report.&nbsp;Europe’s main automotive supplier body, CLEPA, reported that several production lines had already shut down due to depleted inventories. Of the hundreds of export licence requests submitted by European suppliers since April, only around 25 per cent have been approved, with many reportedly rejected on “highly procedural grounds”, according to CLEPA.&nbsp;EU officials are now scrambling for alternatives. European Commissioner for Industrial Strategy, Stephane Séjourné, said the situation has “increased our will to diversify”, as Brussels identified 13 new mining and processing projects outside China. EU Trade Commissioner Maroš Šefčovič also announced discussions with his Chinese counterpart to clarify the licensing situation, as per Reuters.<h2>China’s dominance and strategic retaliation</h2>According to the US Geological Survey, China accounts for more than 70 per cent of rare earth mine production and over 90 per cent of global rare earth processing capacity. This strategic dominance gives Beijing a powerful lever in any trade negotiation.&nbsp;&nbsp;The current restrictions are part of a broader retaliatory package China introduced in response to President Trump’s tariffs,&nbsp;which, at their peak in April, reached up to 145 per cent on selected Chinese imports.&nbsp;While the two countries reached a temporary truce in May and agreed to roll back some of the tariffs, rare earth restrictions were not lifted. In a social media post quoted by Reuters last Friday, Trump accused China of violating the terms of the truce. “China is not keeping its word,” Trump said, adding that President Xi Jinping remains “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH”.&nbsp;Talks between the two leaders are expected to take place later this week, with rare earth exports likely to top the agenda.<h2>Industry scrambling for alternatives</h2>Global carmakers and suppliers are now exploring alternative sources and technologies. General Motors, BMW, ZF, and BorgWarner have all begun developing motors that use fewer or no rare earth elements. BMW, for instance, has deployed magnet-free electric motors in its latest EV lineup, although it still requires rare earths for other smaller systems.&nbsp;However, the shift away from China-dominated supply chains is complex and expensive. According to Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, many companies only have enough rare earth stockpiles to last “a few weeks or months.” In an emailed statement to Reuters, Weber said companies feel “abandoned by politicians” and are resorting to independent negotiations in China to secure permits.&nbsp;Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, said it has not yet been affected but has formed an internal task force to assess the risk and prepare contingency plans, as quoted by Reuters.<h2>The road ahead</h2>The ongoing export curbs are having a chilling effect on global manufacturing just as automakers are investing heavily in electrification. Rare earths are a linchpin of that green transition and China’s grip on the supply chain underscores the geopolitical complexity of that ambition.&nbsp;While industry players lobby governments for fast-tracked alternatives and stockpiling strategies, the outcome of Trump and Xi’s expected talks could shape the next chapter of this high-stakes trade dispute. Until then, both American and European industries remain on edge, bracing for further supply disruptions as China flexes its mineral muscle.&nbsp;

China, which controls 90% of the global processing capacity for rare earths, has tightened export restrictions following US-China trade war.

A leading US vehicle suppliers’ group has sounded the alarm over China’s export restrictions on rare earth elements, warning that the curbs could soon disrupt auto parts production across the country. The group, known as MEMA, the Vehicle Suppliers Association, has called for “immediate and decisive action” from the US government, stressing that the industry is already facing “serious, real-time risks” to its supply chains, according to a statement quoted by Reuters. China, which dominates over 90 per cent of the global processing capacity for rare earths, tightened export restrictions in early April, requiring companies to obtain special licences to ship rare earth minerals and magnets abroad. The move followed the escalation of a US-China trade war triggered by President Donald Trump’s sweeping tariffs on Chinese imports, with Beijing now leveraging its grip on critical mineral supply chains in response. What are rare earths, and why do they matter? Rare earth elements are a group of 17 chemically similar metals used extensively in high-tech and green technologies. From electric vehicle motors and automatic transmissions to fighter jets, wind turbines, and smartphones, rare earths are vital to modern manufacturing. They are especially critical in the automotive industry, powering components such as alternators, motors, seatbelt systems, sensors, and cameras. Exporters in China must now submit lengthy applications, sometimes hundreds of pages long, to qualify for export licences. As per a Reuters report, China’s rare-earth magnet exports halved in April amid confusion over the new system, paralysing supply chains that had long depended on Beijing’s stability and efficiency. US suppliers face mounting pressure In a joint letter sent on 9 May to the Trump administration, MEMA and the Alliance for Automotive Innovation, representing automakers such as General Motors, Toyota, Volkswagen, and Hyundai, warned that the restrictions could bring the auto sector to a standstill. The letter, first reported by Reuters, said suppliers “will be unable to produce critical automotive components” without reliable access to rare earths. The situation has already disrupted operations. Ford, for instance, shut down production of its Explorer SUV at its Chicago plant for a week in May due to a rare-earth shortage. The White House has not yet responded publicly to the growing pressure from the auto industry, as per Reuters. European auto giants also feel the strain The ripple effects are now being felt across Europe. On 4 June, a Reuters report revealed that some auto parts factories in Europe have temporarily suspended output. Mercedes-Benz said it is in discussions with suppliers to build up stockpiles of rare earths, though it has not yet experienced a shortage. BMW confirmed that parts of its supplier network have been affected, even as its own production lines continue operating normally, according to a Reuters report. Europe’s main automotive supplier body, CLEPA, reported that several production lines had already shut down due to depleted inventories. Of the hundreds of export licence requests submitted by European suppliers since April, only around 25 per cent have been approved, with many reportedly rejected on “highly procedural grounds”, according to CLEPA. EU officials are now scrambling for alternatives. European Commissioner for Industrial Strategy, Stephane Séjourné, said the situation has “increased our will to diversify”, as Brussels identified 13 new mining and processing projects outside China. EU Trade Commissioner Maroš Šefčovič also announced discussions with his Chinese counterpart to clarify the licensing situation, as per Reuters. China’s dominance and strategic retaliation According to the US Geological Survey, China accounts for more than 70 per cent of rare earth mine production and over 90 per cent of global rare earth processing capacity. This strategic dominance gives Beijing a powerful lever in any trade negotiation. The current restrictions are part of a broader retaliatory package China introduced in response to President Trump’s tariffs, which, at their peak in April, reached up to 145 per cent on selected Chinese imports. While the two countries reached a temporary truce in May and agreed to roll back some of the tariffs, rare earth restrictions were not lifted. In a social media post quoted by Reuters last Friday, Trump accused China of violating the terms of the truce. “China is not keeping its word,” Trump said, adding that President Xi Jinping remains “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH”. Talks between the two leaders are expected to take place later this week, with rare earth exports likely to top the agenda. Industry scrambling for alternatives Global carmakers and suppliers are now exploring alternative sources and technologies. General Motors, BMW, ZF, and BorgWarner have all begun developing motors that use fewer or no rare earth elements. BMW, for instance, has deployed magnet-free electric motors in its latest EV lineup, although it still requires rare earths for other smaller systems. However, the shift away from China-dominated supply chains is complex and expensive. According to Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, many companies only have enough rare earth stockpiles to last “a few weeks or months.” In an emailed statement to Reuters, Weber said companies feel “abandoned by politicians” and are resorting to independent negotiations in China to secure permits. Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, said it has not yet been affected but has formed an internal task force to assess the risk and prepare contingency plans, as quoted by Reuters. The road ahead The ongoing export curbs are having a chilling effect on global manufacturing just as automakers are investing heavily in electrification. Rare earths are a linchpin of that green transition and China’s grip on the supply chain underscores the geopolitical complexity of that ambition. While industry players lobby governments for fast-tracked alternatives and stockpiling strategies, the outcome of Trump and Xi’s expected talks could shape the next chapter of this high-stakes trade dispute. Until then, both American and European industries remain on edge, bracing for further supply disruptions as China flexes its mineral muscle.

US vehicle suppliers' group, MEMA, has called for immediate action from the US government over China's export restrictions on rare earth elements, citing potential disruption to auto parts production.&nbsp;

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