US business activity moderates; price pressures building up
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Goldman Sachs launches AI assistant firmwide, memo shows
Around 10,000 employees at the bank are already using the GS AI Assistant, the memo sent to staff by Chief Information Officer Marco Argenti showed. Goldman joins a long list of big banks already leveraging the technology to shape their operations in a targeted manner and help employees in day-to-day tasks.
June 23 (Reuters) – Goldman Sachs (GS.N) , opens new tab on Monday announced a firmwide launch of an artificial intelligence assistant, a tool driven by generative AI, to boost productivity, according to an internal memo seen by Reuters.
Around 10,000 employees at the bank are already using the GS AI Assistant, the memo sent to staff by Chief Information Officer Marco Argenti showed.
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With the AI tool’s official company-wide launch, Goldman joins a long list of big banks already leveraging the technology to shape their operations in a targeted manner and help employees in day-to-day tasks.
Citigroup (C.N) , opens new tab has AI tools such as Citi Assist, which searches internal bank policies and procedures, as well as Citi Stylus, which helps with document summarizing and comparisons.
The GS AI assistant will help Goldman employees in “summarizing complex documents and drafting initial content to performing data analysis,” according to the internal memo.
Reporting by Saeed Azhar and Pritam Biswas in Bengaluru; Editing by Shreya Biswas
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Fed’s Bowman open to cutting rates at July policy meeting
Federal Reserve Vice Chair says it’s time to cut interest rates. She says she’s less concerned about the impact of tariffs on the economy. The Fed is expected to keep its key rate at a record low of 1.5%. The next meeting of the Federal Reserve is on July 29-30, when rates are expected to be cut to 0.5% for the first time in a year. The U.S. economy grew at a rate of 0.4% in the first quarter, the slowest in more than a decade, according to the Fed’s own data. The economy is now expected to grow by 0.7% to 1.3% in 2014. The rate of inflation is now at 0.8%.
Summary Fed’s Bowman says time to weigh cutting rates
Bowman says open to July rate cut if inflation contained
Bowman less worried tariffs will drive up inflation
NEW YORK, June 23 (Reuters) – Federal Reserve Vice Chair for Supervision Michelle Bowman, recently tapped by President Trump as the central bank’s top bank overseer, said Monday the time to cut interest rates may be fast approaching as she is growing more worried about risks to the job market and is less concerned tariffs will cause an inflation problem.
“It is time to consider adjusting the policy rate,” Bowman said in the text of remarks to be delivered before a gathering held in Prague, Czech Republic. Bowman said inflation appears to be on a sustained path back to 2% and she said she expects “only minimal impact” on inflation from trade policy.
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“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said.
Last week, the Federal Reserve meeting in a gathering that left its overnight target-rate range fixed between 4.25% and 4.5%. Officials remained in a wait-and-see mode amid the considerable economic uncertainty created by President Donald Trump’s erratically implemented trade policy. Fed officials are worried surging import taxes could depress growth while restarting what had been cooling inflation pressures.
Bowman said in her speech that she supported the Fed’s decision to hold steady. But the appears to see far fewer storm clouds ahead for the economy, and in her speech, she said more clarity is arriving over the outlook. Bowman’s openness to cutting rates is joined by that of Fed Governor Christopher Waller, who said in a television interview Friday he’d also consider a rate cut at the July 29-30 meeting. Waller is widely considered to be in the running to succeed Fed Chair Jerome Powell, whose term ends next year.
Trump has repeatedly pressured the Fed to pursue very large rate cuts amid insults to Powell. Observers believe any Fed chair would need to align with Trump’s desire for much lower short-term borrowing costs.
In her remarks, Bowman noted the job market is still in a good place but she’s more worried about what lies ahead for the sector, and that’s part of what’s informing her dovish monetary policy views.
“We should also recognize that downside risks to our employment mandate could soon become more salient, given recent softness in spending and signs of fragility in the labor market,” Bowman said.
The Fed official was also quite sanguine on the inflation outlook, saying “it appears that any upward pressure from higher tariffs on goods prices is being offset by other factors and that the underlying trend in core [Personal Consumption Expenditures] inflation is moving much closer to our 2% target than is currently apparent in the data.”
Reporting by Michael S. Derby, Editing by Louise Heavens
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US existing home sales rise in May; mortgage rates still a constraint
Home sales climbed 0.8% last month to a seasonally adjusted annual rate of 4.03 million units. The sales pace was the slowest for the month of May since 2009. “The relatively subdued sales are largely due to persistently high mortgage rates,” said Lawrence Yun, the NAR’s chief economist. The average rate on the popular 30-year fixed-rate mortgage has hovered just under 7% this year.. President Donald Trump’s aggressive tariffs on imported goods have heightened uncertainty over the economy. The U.S. central bank last week kept its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December.
WASHINGTON, June 23 (Reuters) – U.S. existing home sales unexpectedly increased in May, but the trend remained weak amid high mortgage rates.
Home sales climbed 0.8% last month to a seasonally adjusted annual rate of 4.03 million units, the National Association of Realtors said on Monday. Economists polled by Reuters had forecast home resales falling to a rate of 3.95 million units.
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The sales pace was the slowest for the month of May since 2009.
Sales fell 0.7% on a year-over-year basis in May.
“The relatively subdued sales are largely due to persistently high mortgage rates,” said Lawrence Yun, the NAR’s chief economist. “If mortgage rates decrease in the second half of this year, expect home sales across the country to increase.”
The average rate on the popular 30-year fixed-rate mortgage has hovered just under 7% this year. President Donald Trump’s aggressive tariffs on imported goods have heightened uncertainty over the economy, which the Federal Reserve has responded to by pausing its interest rate cutting cycle.
The U.S. central bank last week kept its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Fed Chair Jerome Powell told reporters he expected “meaningful” inflation ahead due to the import duties.
A National Association of Home Builders survey on Tuesday showed sentiment among single-family homebuilders plummeted to a 2-1/2-year low in June. The NAHB reported an increase in the share of builders cutting prices to lure buyers, and forecast a decline in single-family starts this year.
Residential investment, which includes homebuilding and home sales, contracted slightly in the first quarter after rebounding in 2024 following steep declines in the prior two years caused by a surge in mortgage rates.
The inventory of existing homes increased 6.2% to 1.54 million units in May. Supply surged 20.3% from a year ago.
The median existing home price rose 1.3% from a year earlier to $422,800 in May, an all-time high for the month.
At May’s sales pace, it would take 4.6 months to exhaust the current inventory of existing homes, up from 3.8 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically stayed on the market for 27 days last month compared to 24 days a year ago.
First-time buyers accounted for 30% of sales, down from 31% a year ago. Economists and realtors say a 40% share is needed for a robust housing market.
All-cash sales constituted 27% of transactions, down from 28% a year ago. Distressed sales, including foreclosures, made up 3% of transactions, up from 2% a year ago.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
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Cement maker Holcim completes $30 billion North American spin-off
Holcim has completed the spin-off of its North American business Amrize. The building materials supplier achieved a $30 billion valuation for the business. The company said it aimed to sharpen its focus on the different market dynamics in North America compared with the rest of the world. Holcim said it would target average annual growth in earnings before interest and taxes of 6% to 10% by 2030, driven in part by mergers and acquisitions. It also wants to increase its core operating profit by 8-11% between 2025 and 2028 from $3.2 billion last year.
ZURICH, June 23 (Reuters) – Holcim (HOLN.S) , opens new tab has completed the spin-off of its North American business Amrize , which achieved a $30 billion valuation for the building materials supplier in early trading on Monday.
Shareholders were given one Amrize share for every share in Holcim in the 100% spin-off of the business, which the Swiss-listed company said aimed to sharpen its focus on the different market dynamics in North America compared with the rest of the world.
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Amrize shares opened at 46 Swiss francs on the Six Swiss Exchange, giving it a market capitalisation of 24.7 billion Swiss francs ($30.24 billion), in line with the company’s expectations for a roughly $30 billion valuation.
Its shares later lost 8.8% as Holcim investors sold some of their stock.
Holcim shares fell 33% from Friday’s close to reflect the separation of the North American business, although they were 10.5% above the reference price estimated by brokers for the new stand-alone business.
“Some of the Holcim investors will have sold their Amrize shares straightaway and a lot of Swiss investors are more interested in the decarbonisation story at Holcim,” said Zuercher Kantonalbank analyst Martin Huesler.
Holcim has positioned itself as a lower carbon building materials supplier by producing reduced CO2 cement and re-using waste.
“Overall, the main thing is the stock price of both Amrize and Holcim combined is now more than the 93.68 closing price on Friday, which bodes well for the spin-off,” Huesler added.
The spin-off decision was announced in January 2024, and is not linked to rise in U.S. tariffs.
In March , when it outlined its strategy following the separation, Holcim said it would target average annual growth in earnings before interest and taxes of 6% to 10% by 2030, driven in part by mergers and acquisitions.
Amrize, which had sales of $11.7 billion in 2024, aims to grow sales by 5-8% annually. It also wants to increase its core operating profit by 8-11% between 2025 and 2028 from $3.2 billion last year.
($1 = 0.8168 Swiss francs)
Reporting by John Revill and Oliver Hirt, Editing by Miranda Murray and Barbara Lewis
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Wolfspeed plans US bankruptcy filing in deal reached with creditors
U.S. power chip maker Wolfspeed (WOLF.N) plans to file for bankruptcy in the United States under a restructuring agreement with creditors. The agreement would provide it with fresh financing and slash debt by nearly 70%, the struggling chipmaker said on Sunday. Wolfspeed plans to seek approval on its pre-packaged plan and subsequently emerge out of bankruptcy by the end of third quarter of the calendar year 2025. Last week, Bloomberg News reported that Wolfspeed would be taken over by creditors, including Apollo Global Management.
June 22 (Reuters) – Wolfspeed (WOLF.N) , opens new tab plans to file for bankruptcy in the United States under a restructuring agreement with creditors, which would provide it with fresh financing and slash debt by nearly 70%, the struggling chipmaker said on Sunday.
Wolfspeed raised going-concern doubts in May, as deepening economic uncertainty stemming from changing U.S. trade policies, combined with weakening demand, triggered a series of financial challenges.
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The restructuring agreement, reached with creditors and Renesas Electronics’ (6723.T) , opens new tab U.S. subsidiary, would result in $275 million in fresh financing backed by some existing creditors and help reduce debt by $4.6 billion, Wolfspeed said in a statement.
Wolfspeed plans to seek approval on its pre-packaged plan and subsequently emerge out of bankruptcy by the end of third quarter of the calendar year 2025.
In a prepackaged bankruptcy, companies and their creditors agree on a reorganization plan prior to the bankruptcy filing and creditors vote on the plan.
The company intends to continue regular operations throughout the restructuring process.
As of March, it had about $1.33 billion in cash, and about $6.5 billion of debt obligations.
Last week, Bloomberg News reported about the firm’s plans to file for a prepackaged bankruptcy. The report said that Wolfspeed would be taken over by creditors, including Apollo Global Management (APO.N) , opens new tab
In 2023, Wolfspeed announced $1.25 billion in debt financing led by Apollo, with the option to increase the total to as much as $2 billion to support its U.S. expansion.
The firm has undergone a series of leadership changes in the last few months, appointing industry veteran Robert Feurle as its CEO in March and David Emerson as COO in May after announcing in May that it will cut its senior leadership team by 30%.
Reporting by Rhea Rose Abraham and Kanjyik Ghosh in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala
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