Scott Bessent Says Fed Could Cut Rates by September or 'Sooner'

Source: marketscreener

President Donald Trump said he had reached a trade deal with Vietnam following weeks of intense diplomacy between the nations and ahead of a deadline next week that would have seen higher tariffs imposed on the country’s imports.

Under the agreement, Vietnam will pay a 20% tariff on exports to the US, with a 40% levy on any transshipments, Trump said in a social-media post on Wednesday. Trump said that Vietnam had agreed to drop all levies on US imports.

“In other words, they will “OPEN THEIR MARKET TO THE UNITED STATES,” meaning that, we will be able to sell our product into Vietnam at ZERO Tariff,” Trump wrote. The president said he he had secured the deal after discussions with Communist Party chief To Lam.

The deal with Vietnam would be just the third announced following agreements with the UK and China as trading partners race to cut agreements with the US ahead of a July 9 deadline.

Trump had imposed a 46% duty on Vietnam as part of his initial rollout of so-called reciprocal tariffs in early April that were levied on dozens of countries, but were then pared back to 10% to allow time for negotiations.

The Southeast Asian nation has seen its sales to US markets surge in recent years, partly because manufacturers shifted production there from China. It’s a major supplier of textiles and sportswear, hosting factories for companies such as Nike Inc., Gap Inc. and Lululemon Athletica Inc. Vietnam was the sixth-biggest supplier of US imports last year, sending goods worth almost $137 billion, according to Census Bureau data.

Shares in furniture stocks and apparel makers rose after Trump’s post, with ON Holding, Nike and Lululemon jumping to hit session highs, rising as much as 7.2%, 3.9% and 2.9%, respectively.

The deal with Vietnam was struck after weeks of discussions during which the US pressured the country to get tougher on trade fraud, ensure stricter enforcement against the transshipment of Chinese products, and also pushed for the removal of non-tariff barriers.

Vietnam offered to remove all tariffs and repeatedly promised to purchase more American goods. Senior Vietnamese officials flew to the US to rally support and sign deals, including for $3 billion of agricultural goods. The trade minister also wooed executives from Nike, Gap and others to encourage them to get behind negotiation efforts.

Brands raced to move manufacturing to Vietnam over the past decade as US-China tensions escalated. The industrial shift from China to Vietnam also helped build the kind of massive trade gap that made it a prime tariff target for Trump.

Last year, Vietnam’s trade surplus with the US was the third-largest globally on a country basis behind only China and Mexico. Shipments in May jumped 35% as firms sought to get goods onto vessels as quickly as possible ahead of the deadline.

Source: Bloomberg Europe

Source: Theguardian

source :cnbc

The European Central Bank has reached the end of its rate cycle - and has become ensnared in the very problems to which it has significantly contributed. In Sintra, this was all but hidden behind a facade of central banker utopia.

The annual Sintra conference, just west of Lisbon, serves the ECB much as Jackson Hole does for the Federal Reserve. It’s a moment to review, to look ahead, and to tie the past year’s monetary policy into a broader political narrative. For ECB President Christine Lagarde, that narrative is easily summed up: after eight cuts, rates now rest at two percent; inflation hovers around the two-percent target; employment across the eurozone remains stable; and a fresh debt crisis is nowhere in sight.

That is the essence of Lagarde’s Sintra address—designed to convey one message: everything is under control. Even uncertainties such as Trump-era trade volatility, geopolitical upheavals, or the collapse of German industry are said not to derail the ECB’s set course. Following the market flood during the lockdowns, things are now deemed normal—markets “swing” around their equilibrium. In central bank parlance: they’ve found the “neutral rate.”

The Chimera of the Neutral Rate

The “neutral rate” is the holy grail of central banking mystique. When policy makers feel secure, and media campaigns successfully mask the erosion of fiat currency, it becomes the mantra. In this worldview, the ECB’s policy rate and some theoretical, consolidated market rate align—not by chance, but by design. Even before Lagarde’s closing remarks, ECB Executive Board members Joachim Nagel and Philip Lane had laid the groundwork all through June, repeatedly sending the “neutral-rate” message.

That message? That they have balanced inflationary and deflationary forces and steered the eurozone back onto a growth trajectory. Let’s skip debates over manipulated inflation stats and dramatically understated unemployment figures. These neutral-rate narratives are nothing more than central-bank fairy tales from One Thousand and One Nights—prepackaged press releases meant to evoke sovereignty. Economic processes don’t reduce to such simplistic frameworks. But that’s precisely not the point: the neutral-rate story is a sedative—for governments and markets alike.

The Fiscal Original Sin

The tale of the ECB as guardian of monetary stability is a relic of Bundesbank days. That era is long gone. Central banks worldwide, dragged into political-fiscal entanglements during the last debt crisis 15 years ago, have since become dependent. During the lockdowns alone, the ECB’s PEPP absorbed €1.85 trillion of eurozone sovereign debt—and today still holds roughly a third of that mountain of obligations.

Today, the ECB’s sole goal is to keep those sovereign debt-stacks liquid—buying up bonds shunned by the market to maintain the illusion that public debt, generous welfare, and Keynesian interventionism are all sustainably reconcilable.

Eurozone governments have long relied on external liquidity. With public debt averaging 100 percent of GDP, many member states would be insolvent without the ECB’s backstop. That would have consequences—not just for markets, but for social cohesion, internal stability, and the self-image of an EU-Europe built on oversized welfare motors that offer citizens a false sense of security and dangerously misjudge public capacity.

A withdrawal of the ECB from this nexus of fiscal irresponsibility, monetary support, and political overreach is thus unthinkable. The central bank is no longer just a guardian of the currency—it is the stabilizer of an eroding social model. Through indirect means and backdoor channels, it is underwriting pensions, welfare budgets, bureaucratic cogs—and obscuring how fragile the whole edifice has become.

The ECB is the last mortar holding that crumbling structure together. Remove it, and the house of cards collapses instantly. Which is why Lagarde and cohort must preserve the illusion of a steerable eurozone.

The Facts Tell a Different Story

Beyond the gloss of Sintra—in the real world of data—the eurozone is in serious crisis. Industry continues to shrink, and construction is in a deep recession. Over 50 percent of firms cite insufficient orders. Since 2021, German industry alone has cut 217,000 jobs—and by year’s end will lose another 100,000. Deindustrialization is advancing. Production is being moved abroad. Capital is fleeing, and productivity has stalled for eight years running.

The result: countries’ tax bases are eroding. Revenues fall and welfare costs rise, pushing debt burdens higher. Without genuine reforms, the eurozone risks a debt crisis that will once again force the ECB to serve as lender of last resort.

Years of zero interest have immersed the eurozone in the sweet poison of cheap credit. Now, subvention-dependent firms are collapsing under real positive rates. That’s “zombie economy.” And the latest casualty of green industrial planning—Northvolt—is just the latest to close its doors, a consequence of centrally managed economic policy.

Fed Holds Tough

Making matters worse: across the Atlantic, the Federal Reserve stands firm on its consolidation path, keeping rates at 4.5 percent—well above other major central banks. The U.S. is clearly prepared to accept a positive market rate, giving its economy room to purge unproductive elements. This lets productive capital reposition and fuel a fresh investment cycle. With tax cuts, energy deregulation, and rolling back green agendas, the U.S. is becoming a capital magnet—one that European economies can only envy.

In Washington, the view is clear: a period of pain brings greater rewards. While the U.S. equips itself administratively, technically, and innovatively for the digital age, EU-Europe stages a competition in ever-expanding welfare plans—rent caps, social handouts, green subsidies: consumption decreed and regulated to substitute for the productive machinery of revenue generation.

Europe has become addicted to welfare-state subventionitis—sticking to a hyper-statist model to defer social and economic pain. And always in the wings: the ECB and its fatal money press. How long this can last, only time will tell. But market tensions are mounting. The day when those tensions trigger a seismic shift, shaking the tectonic plates of the economy into new alignment, looms ever closer.

Source: Zero Hedge

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Source: investing