Banks

SACRAMENTO — With coronavirus cases continuing to rise across much of California and many workers unemployed indefinitely, several major banks and other lenders have agreed to provide mortgage relief to homeowners struggling to make their monthly payments.

The assistance arrives as more than 1 million Californians applied for unemployment benefits over the course of just 12 days through Wednesday because of layoffs or reduced hours amid the pandemic, Gov. Gavin Newsom said Wednesday.

Eligible homeowners would be able to defer mortgage payments for at least three months and perhaps longer if they suffer hardship due to the pandemic. Late payments would not be reported to credit agencies.

Along with the mortgage assistance, Newsom is urging the lenders to extend financial relief to small businesses and student loan recipients “in the days and weeks to follow,” according to an email sent recently to financial institutions by state Department of Business Oversight Commissioner Manuel P. Alvarez.

The moves came as public health officials reported a continued increase in COVID-19 cases, including in Los Angeles County, where the county health officer on Wednesday ordered that all those who test positive for the coronavirus self-isolate, along with those in close contact with the infected.

Officials confirmed 138 new COVID-19 cases Wednesday in the state’s most populous county, for a total of more than 800. Three additional deaths brought the total in Los Angeles County to 13. Statewide, more than 3,100 of those tested have been confirmed to have infections, while 67 have died.

Public health officials emphasized that the actual number of people infected is almost certainly higher, but an accurate count is impossible because so few tests have been given.

The mortgage relief package that Newsom described at an afternoon news conference will come from four of the nation’s largest banks — Wells Fargo, U.S. Bank, Citibank and JPMorgan Chase — as well as 200 state-chartered banks and credit unions.

“We still have people that are struggling to get back to where they were before the Great Recession,” Newsom said of the financial struggles Californians have experienced, now exacerbated by the coronavirus outbreak.

Newsom noted that another huge lender, Bank of America, agreed only to allow customers to defer mortgage payments for one month, but said he is hopeful the institution “will do the right thing” in the near future.

Bank of America disputed Newsom’s assertion that it resisted providing more generous mortgage relief to homeowners. “Bank of America is deferring mortgage payments on a monthly basis until the crisis is over,” spokesman Bill Halldin said.

The continued spread of the coronavirus and the resulting wreckage of the economy suggest the need for even greater financial relief for consumers, Alvarez said in his email.

“As we continue the battle on the public health front, we must also brace ourselves for a financial crisis that is only beginning,” Alvarez wrote. “Now is the time for all institutions, public and private, to do our part in staving off a tsunami of financial harm barreling toward California consumers.”

The governor’s announcement came a week after he ordered all California residents to stay home to help stem the spread of the virus, with limited exceptions for essential workers, including doctors, nurses, grocery store employees and truckers.

Thousands of Californians have lost their jobs or have seen their working hours dramatically reduced, particularly in the hospitality and service industries. And the hardships fall on millions in the state who already struggle to make mortgage and rent payments, given skyrocketing housing costs.

The federal government this month announced that Americans with loans backed by the government-sponsored agencies Fannie Mae or Freddie Mac would be eligible to defer mortgage payments and be shielded from foreclosure if they could not afford to make payments because of the outbreak.

More than 30 state lawmakers on Wednesday sent a letter to Newsom asking for a statewide eviction moratorium. They say fewer than 50 local governments — out of the 539 cities and counties statewide — have passed moratoriums, as the governor urged last week.

Housing advocates called for an eviction ban statewide, particularly for those who aren’t working as a result of the coronavirus. Newsom has said he will take additional steps if he believes local jurisdictions are failing to protect their residents.

Officials warned that the worst days of the pandemic in California are yet to come.

Los Angeles Mayor Eric Garcetti said the city could be six to 12 days from seeing a spike in infections and hospitalizations like the one now afflicting New York City, where the death toll has dramatically increased in recent days.

“It’s coming,” Garcetti said. “The peak is not here yet. The peak will be bad. People will lose their lives.”

San Francisco leaders issued a similar warning, saying it was “plausible” the city could face a crisis similar to the one in New York and fall 1,500 ventilators and 5,000 hospital beds short of the numbers needed.

“It is not even a question as to whether we will need more,” Mayor London Breed said during an hourlong news conference. “Sadly, things are going to get worse.”

Anticipating a surge of patients in the coming days, government officials were working to find additional hospital beds. More than 1,000 beds will be provided by the Navy ship Mercy, which will arrive in Los Angeles on Friday, earlier than expected, according to Pentagon Press Secretary Alyssa Farah.

Officials in Los Angeles and San Francisco rejected suggestions from President Trump that there could be a quick easing of restrictions.

Garcetti said Angelenos should be “prepared for a couple months like this.”

“I know that everybody is hopeful, and some are putting out that hope of us being back in churches by Easter or synagogues by Passover or restarting the economy in a couple weeks,” Garcetti said. “I think we owe it to everybody to be straightforward and honest. We will not be back to … that level of normal in that short period of time.”

Dr. Grant Colfax, director of health for San Francisco, concurred.

“I know there are people out there who will lead you to believe our efforts are too aggressive,” Colfax said, “but I cannot stress enough just how vital they are.”

Los Angeles County Public Health Department Director Barbara Ferrer also said residents should not expect an immediate return to normality.

“We would be foolish to not prepare for a similar scenario in L.A. County,” she said. “We talk about numbers, but these aren’t numbers — these are people’s lives.”

Times staff writers Rong-Gong Lin II, Maura Dolan, Taryn Luna and Colleen Shalby contributed to this report.

BBC Morning Live expert Laura Pomfret has highlighted the top six easy access ISA accounts as savers face the ‘last chance’ to use the full tax-free allowance

A BBC finance expert has outlined which ISA accounts people should be considering as a ‘fresh start’ gets underway. With the new financial year having kicked off on 6 April, savers have the opportunity to make use of cash ISA accounts for up to £20,000 of tax-free savings — and crucially, it’s the final year before this allowance is reduced.

Appearing on BBC Morning Live, finance expert Laura Pomfret explained what people should be doing and highlighted which accounts are currently offering the most competitive interest rates.

She said: “It is a fresh start and there’s an opportunity to make the most of your money and we’re going to start with cash is because the ISA limit resets every year and we’ve got £20,000 per person that we can utilize within cash ISA, stocks and shares is lifetime is a little bit different, but it’s a way of growing your savings tax-free because you know saving is a really good thing and you do make interest on it but if it’s outside of an ISA you will have to pay tax on that interest.”

Those with savings held outside of ISAs remain liable for tax. Ms Pomfret further explained: “Most people get a personal savings allowance per year so if you’re a basic rate taxpayer you can earn £1,000 outside of an ISA tax free it drops to £500 when you are a higher rate taxpayer but basically this is why we should use our ISA allowance first because you can put £20,000 in and not have to worry about any interest that you make you don’t have to pay tax on it.”

Those with ISAs are set to face a significant change from 7th April 2027. She explained: “This is the last tax year before the allowance for a cash ISA drops to £12,000. So this is the last year that you get £20,000 that you can put into a cash ISA, and then going forward from 6th of April next year, 2027, it drops to £12,000, apart from if you’re 65 or over, you can save into a cash ISA, and you get the other allowance. So it’s important to maximise that this year while you can.”

Host Helen Skelton asked: “If you are in a position that you can save money, where should you put it right now?”

According to the BBC expert, there are six accounts worth considering for ‘easy access’ savings. She stated: “Easy access is where you can get it in and out usually without penalty, but you can have a look at the terms and conditions and these are some of the best. So, first up, we’ve got Trading 212 with a 4.6% interest rate.”

“It drops after the first year. Now, to be clear, that is an investment platform as well, but they do have a cash ISA that you can use, and they’ve got a 4.6%. You’ve then got, for example, Virgin Money with a 4.15%. You are limited to two withdrawals per year on that. So, it’s classed as an easy access, but there are some limits to withdrawals.

“So, Bank of Ireland UK 4.06%. The rate drops after a year with that one. It’s like a you know in a new rate, and then interest is paid annually. Leeds Building Society of 4.05%. You have to pay in a minimum of £1,000 to get that one. Um, Yorkshire Building Society, 4.05%, withdraw as often as you want. And then Tesco Bank, for example, 4.02%, the rate drops after a year. With that one, you can do it over the phone. The rest are all online or using the app. But these are just examples. These rates change quickly.”

Top ISA easy access accounts highlighted

• Trading 212 4.6%
• Virgin Money 4.15%
• Bank of Ireland UK 4.06%
• Leeds Building Society 4.05%
• Yorkshire Building Society 4.05%
• Tesco Bank 4.02%

She explained that, generally, individuals should check comparison websites for terms and conditions, with at least 4% interest being the crucial figure.

She continued: “You may get higher if you go for a fixed, but this is where your money can be fixed and locked away for one, two, three years. So this is about choosing what’s right for you.

“If you can afford to put some away and not need access to it, you might beat that rate with a fixed one. And obviously, as I said earlier, there’s also stocks and shares is you could look at a lifetime is if you fit the criteria, but ultimately getting it in tax wrapper is a great thing to do so that you can you know grow your interest tax-free.”

A United States federal judge has once again batted down a pair of subpoenas from the administration of President Donald Trump seeking information about Jerome Powell, the chairman of the Federal Reserve, the country’s central bank.

In a brief, six-page opinion published on Friday, Judge James Boasberg rejected the Department of Justice’s motion to reconsider his earlier ruling rejecting the subpoenas.

“The Government’s arguments do not come close to convincing the Court that a different outcome is warranted,” Boasberg wrote.

On March 13, Boasberg, a judge for the federal court in the District of Columbia, nullified the subpoenas on the basis that they were issued for an “improper purpose”: to pressure Powell into compliance with the president’s demands.

Trump and Powell — an appointee from the president’s first term — have been at loggerheads since the Republican leader returned to the White House in January 2025.

Although the Federal Reserve is an independent government agency, not subject to political demands, Trump has repeatedly called on the bank to slash interest rates, and he has denounced Powell as “incompetent”, “crooked” and a “fool” for not following suit.

For months, pressure had been building from the Trump White House to investigate Powell and push him prematurely from his job as Federal Reserve chair. Powell’s term is slated to expire in May.

Much of the Trump administration’s focus has fallen on renovations to the Federal Reserve’s historic 1930s buildings in Washington, DC, which have gone over budget.

The administration has pointed to the cost overruns as evidence of malfeasance.

Last July, for instance, Trump appointee William Pulte called on Congress to investigate Powell for “political bias” and “deceptive” testimony related to the renovation project.

The following month, Trump posted on his platform Truth Social that he was considering “a major lawsuit against Powell” in response to “horrible, and grossly incompetent” work on the renovations.

The pressure reached a climax on January 11, when Powell made a rare statement announcing he was under a Justice Department investigation over the renovation project. He dismissed the probe as a “pretext” to undermine the Federal Reserve’s leadership over monetary policy.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said.

The Federal Reserve has since sought to have the subpoenas into Powell’s behaviour tossed.

Boasberg sided with the central bank in his initial ruling, and in Friday’s opinion, he called the Trump administration’s efforts to change his mind insufficient.

The Justice Department had argued that it does not need to produce evidence of a crime to seek a grand jury subpoena.

Boasberg agreed with that point, but he said subpoenas were also subject to a legal standard that bars them from being issued for “improper” purposes.

“The subpoena power ‘is not unlimited’ and may not be abused,” Boasberg wrote, citing court precedent.

He therefore ruled that the lack of evidence overall against Powell was relevant to the legality of the subpoenas.

“The controlling legal question is what these ‘subpoena[s’] dominant purpose’ is: pressuring Powell to lower rates or resign, or pursuing a legitimate investigation opened because the facts suggested wrongdoing,” Boasberg said.

“Resolving that question requires probing whether the Government’s asserted basis for the subpoenas — suspicions of fraud and lying to Congress — is colorable or tenuous. That inquiry, in turn, means asking how much evidence there is to back up the Government’s assertions.”

Boasberg underscored that he has seen no suggestion that Powell committed criminal wrongdoing and pointed to the long list of statements Trump has made attacking the Federal Reserve chair, suggesting an ulterior motive.

“The Government’s fundamental problem is that it has presented no evidence whatsoever of fraud,” he concluded.

Friday’s ruling is likely to set the stage for the Trump administration to appeal. US Attorney Jeanine Pirro has previously denied any political motivation for the investigation.

She has also asserted that Boasberg is “without legal authority” to nullify the subpoenas.

Interior minister says ‘vigilance at high level’, after police arrest suspect before setting off explosive device outside US bank’s headquarters.

French authorities have opened an investigation into a foiled ⁠attack targeting Bank of America’s Paris headquarters after police detained one suspect who was allegedly attempting to ignite an explosive device outside the building.

In a social media post on Saturday, Interior Minister Laurent Nunez said the swift intervention by police had “thwarted a violent terrorist attack” in the French capital the previous night.

French newspaper Le Parisien cited a police source as saying the suspect was arrested at about 3:25am local time (02:25 GMT) outside the bank’s local headquarters in the city’s 8th arrondissement as he tried to light a device consisting of a five-litre (1.3-gallon) container filled with an unidentified liquid and an explosive charge made up of about 650 grams (23 ounces) of powder.

The suspect was taken into custody, while a second individual who was present fled the scene and remains at large. The device was taken to the Paris police’s forensics lab for full analysis.

The National Terrorism Prosecution Office told the Reuters news agency the suspected offences included attempted destruction by fire or other dangerous means in connection with a “terrorist plot”, as well as ⁠the making, possession ⁠and transport of an incendiary or explosive device with intent ⁠to carry out dangerous damage.

The probe ⁠also includes a ⁠charge of participation in a “terrorist” criminal association, covering potential ‌links to accomplices or a broader network, it said.

“Vigilance remains at a very high level,” said Nunez on X, thanking “security and intelligence forces, who are fully mobilised under my authority” in what he called the “current international context”, seemingly with reference to the escalating situation in parts of the Middle East amid the US-Israeli war on Iran.

Earlier in the week, Nunez had said that authorities had stepped up the personal protection of some figures from the Iranian opposition and increased security around sites that risked being targeted, including sites linked to US interests and to the Jewish community.

A spokesperson for Bank of America told Reuters the organisation was “aware of the situation” and “communicating with the authorities”.

CHEAP drinks and great grub – Wetherspoons pubs are a British institution and in some cases, they’re in the most beautiful buildings.

From old bank vaults to beautiful bath conservatories, here are some of the prettiest in the country.

The Winter Gardens, Harrogate

The Winter Gardens began its life as part of the Royal Baths in Harrogate where people went to unwind.

The baths had first opened in 1897 and even though it later turned into a Wetherspoons, it still has lots of its original features.

There’s two grand staircases leading up to the bar and it has a huge glass ceiling which lets the light in.

The Corn Exchange, Bury St Edmunds

One of the most stunning Wetherspoons in the UK can be found in West Suffolk inside a building that was originally a place for Victorian merchants and farmers to trade in the 1800s.

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It has a grand interior features an arching glass roof and elegant wooden panelling.

Unlike lots of other pubs, this one is found on the first floor as there are shops underneath.

The Royal Victoria Pavilion, Ramsgate

Not only is the Royal Victoria Pavilion one of the prettiest pubs, it’s also the biggest ever Wetherspoons.

As its name suggests, the pub is inside a former Grade II listed pavilion that dates back to the Victorian period.

To make it ever better, it’s just a short walk from the beach.

For those who want to make the most of being at the seaside, step out onto the balcony where you can see the sweeping beach in all its glory.

Samuel Peto, Folkestone

Right by the beach, Samuel Peto is inside an old church that has painted cloud ceilings and the organ still sits at the back of the pub.

It has pretty chandeliers with huge stained glass windows letting in most of the light.

Deputy Travel Editor Kara Godfrey called it “certainly one of my favourites I’ve ever been to.”

The Caley Picture House, Edinburgh

The former art-deco cinema is now a unique Wetherspoons that looks like it could be in the backdrop if a 1920s movie.

It still has original features including a large screen area and balcony – and you can enjoy a pint up on the mezzanine level which has views over the bar.

The building used to be part of a hotel before it was transformed into a cinema.

Hamilton Hall, London Liverpool Street

Outside of Liverpool Street Station is a Hamilton Hall – the Wetherspoons is inside what was once the Great Eastern Hotel.

It might not look like much from the outside, but the pub is actually inside an old ballroom.

It has a huge circular bar, enormous windows and a hanging chandelier.

Opera House, Royal Tunbridge Wells

Possibly one of the most well-known Wetherspoons for being unique is the one in Royal Tunbridge Wells.

As its name suggests, the Opera House, is inside a former opera house that welcomed the public through its doors for performances back in 1902.

Later on, it was used as a cinema and a bingo hall.

It has original features from its hey-day as a theatre like its colourful booths and stalls – and of course it has Wetherspoons touches too, like the bar and classic patterned carpet.

The North Western, Liverpool

Inside the 330-room North Western Hotel that once was a stopping point for Liverpool Lime Street Station passengers is this pretty Wetherspoons.

The hotel first opened in 1871 but later fell vacant until 1996 when it became university student accommodation.

Eventually it opened as a Wetherspoons pub in 2015 and is very popular with commuters thanks to it being right next to Liverpool Lime Street.

The Palladium, Llandudno

Another Wetherspoons pub that used to be a cinema is in north Wales – and it’s a showstopper.

It first opened to the public in the 1920s, has eye-catching decor with a ceiling with gold detailing and red carpet.

The pub stretches across three floors thanks to its remaining stalls, dress circle and balcony.

The Counting House, Glasgow

Another Scottish Wetherspoons is The Counting House which is inside a former bank.

It’s an Italian Renaissance style building and inside has high ceilings with pretty detailing including a glass dome over the bar.

You can even have a drink in the old underground banking vaults.

Waterend Barn, St Albans

St Albans is known as having lots of places to enjoy a drink, and it’s home to a pretty Wetherspoons too next to the River Lea.

It’s formed of two listed barn buildings and inside has high ceilings lined with beams and an outside area with picnic tables.

The Velvet Coaster, Blackpool

One pub that has incredible beach is The Velvet Coaster which is right next to Blackpool’s South Pier and metres from Blackpool Pleasure Beach.

It’s been described by punters as a Wetherspoons with “beautiful views”.

The pub opened in 2015, it’s set across three floors including a bar on each level and there’s a beer garden on the ground floor.

There’s also a balcony on the first floor, and a roof garden on the top level.

The interior is inspired by elements from Blackpool’s surroundings like the sea and nearby rollercoasters.

For more on pubs, here are ten of the UK’s cosiest pubs with bed and breakfast from £99.

And here are Britain’s most beautiful pubs from historic beer houses to cosy village bars.

March 22 (Asia Today) — South Korea’s four largest banks are tightening corporate payment guarantees as exporters face mounting pressure from U.S. tariffs and a prolonged period of high exchange rates.

The combined value of guarantees issued by KB Kookmin Bank, Shinhan Bank, Hana Bank and Woori Bank reached 79.2 trillion won (about $59 billion) at the end of last year, up 3.9% from a year earlier, according to financial industry data.

The increase marks a sharp slowdown compared with double-digit growth in previous years, reflecting a more cautious approach by banks amid rising economic uncertainty.

Banks have scaled back new guarantees as U.S. tariff policies weigh on export profitability and a weaker won raises costs for companies. The won-dollar exchange rate has hovered around 1,500 won, adding further pressure on corporate balance sheets.

Payment guarantees, commonly used by exporters, allow companies to secure financing or complete trade transactions by relying on a bank’s credit backing. If a company defaults, the bank assumes the repayment obligation.

Industry data show that firm guarantees – where the amount is fixed and the bank assumes the debt – rose 8.5% to 60.9 trillion won (about $45 billion), while contingent guarantees fell 8.8% to 18.3 trillion won (about $13.7 billion).

Analysts said banks are favoring lower-risk transactions and reducing exposure to more complex contingent guarantees, which are harder to manage.

The slowdown also reflects weaker demand. Large exporters, which drove much of last year’s trade growth, often do not require bank guarantees, while rising delinquency risks have prompted lenders to focus on balance sheet stability.

Looking ahead, growth in guarantees is expected to remain subdued as geopolitical tensions in the Middle East and global logistics disruptions continue to weigh on trade.

A prolonged period of high exchange rates could further increase risks, as most guarantees are denominated in foreign currencies, meaning their value rises in won terms even without new issuance.

Experts say stabilizing the foreign exchange market and expanding trade finance support will be key to preventing broader financial strain on companies.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260323010006560

The United States Federal Reserve will hold interest rates steady as the labour market cools and prices on goods and services surge following the US and Israel’s joint strikes on Iran.

The central bank will maintain its benchmark rate at 3.5–3.75 percent, consistent with the Fed’s decision last month, when it also held rates steady.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the US economy are uncertain,” the central bank said in a statement announcing its policy decision and referring to its Federal Open Market Committee.

“The Committee is attentive to the risks to both sides of its dual mandate.”

Holding rates steady was in line with estimates. CME FedWatch, a tool that tracks monetary policy decisions, forecast that there was a 99 percent chance that rates would hold steady.

The stall comes after three rate cuts in 2025.

Global gripes

Consumers are also facing the repercussions of US President Donald Trump’s trade and military policies in their daily expenses.

“Despite meaningful progress on inflation in 2024, Trump’s tariffs have stalled progress and kept inflation persistently above the Fed’s target. Wholesale prices are running hot as service prices surge, and now, Trump’s war in Iran is rocking commodity markets around the globe,” Elizabeth Pancotti, managing director of policy and advocacy at Groundwork Collaborative, an economic think tank, said in comments provided to Al Jazeera.

Last month, the US Supreme Court ruled against the president for his use of the International Emergency Economic Powers Act (IEEPA). The high court said the president exceeded his authority and that the tariffs imposed under that order must be refunded. However, the president then imposed new tariffs not covered by IEEPA.

The White House announced a 15 percent tariff through Section 122, which allows the president to impose tariffs for 150 days. Those changes were reflected in the producer price index report released by the US Department of Labor’s Bureau of Labor Statistics on Wednesday.

Wholesale prices rose by 0.7 percent for the month, marking the biggest one-month surge in a year. Goods prices rose 1.1 percent overall after tumbling for two months. Energy prices rose by 2.3 percent, with the cost of gas or petrol rising by 1.8 percent. Those costs are expected to get higher as tensions rise in the Strait of Hormuz following joint US-Israel strikes on Iran in late February and the subsequent retaliation.

“In the near term, higher energy prices will push up overall inflation; however, it is too soon to know the scope and duration of the potential effects on the economy,” Fed Chair Jerome Powell told reporters.

In the last month, petrol prices have jumped for US consumers. The average price for a gallon of regular gasoline is $3.84, up from $2.92 this time last month.

“The Fed’s inflation worries extend beyond weathering a fleeting wave of one-off price hikes associated with tariffs and, more recently, an energy price spike,” Stephen Stanley, chief US economist at Santander US Capital Markets, told the Reuters news agency.

Labour market stalls

Holding rates steady also comes as the job market stagnates. The latest jobs report, which was released earlier this month, showed that the US economy lost 92,000 jobs, with unemployment rising to 4.4 percent.

Meanwhile, the Job Openings and Labor Turnover Survey, or JOLTS report, which came out last week, showed 6.9 million open jobs in the US, unchanged from the month prior. That shows that employer hiring has stalled and that those who have jobs are seldom leaving for new ones.

“This might be one of the toughest moments in recent memory for the Federal Reserve’s Open Market Committee,” Michael Linden, Senior Policy Fellow at the Washington Center for Equitable Growth, said in remarks provided to Al Jazeera. “Recent data has revealed that economic growth in the back half of last year was extremely weak, the labour market seems to be on the precipice of disaster, and prices keep rising faster than anyone feels comfortable with.”

Political undercurrents

Wednesday’s decision is the second-to-last one of current Fed Chair Powell, whose term is up in May. Powell, who was first appointed by Trump during his first administration, has been a target of Trump’s scorn and criticisms for not cutting interest rates fast enough.

“When is ‘Too Late’ Powell lowering INTEREST RATES?” Trump posted on his social media platform Truth Social on Wednesday morning ahead of the decision.

Previously, Trump said he would not nominate someone to lead the central bank unless the nominee agreed with his position.

“Anybody that disagrees with me will never be the Fed Chairman!” Trump said in a post on Truth Social in December.

“We at the Fed will continue to do our jobs with objectivity, integrity and deep commitment to serve the American people,” Powell told reporters.

Trump’s nominee to succeed Powell, Kevin Warsh, has his nomination in flux as Republican Senator Thom Tillis said he would not vote to advance any of Trump’s nominees to the central bank until a criminal probe into the current chairman, Powell, is closed.

Tillis sits on the Senate Banking Committee, which vets nominees for the central bank, including Warsh. He said he will not approve Trump’s Fed nominees until the probe of Powell is closed. The criminal probe of Powell centres on Fed building renovations after a judge quashed grand jury subpoenas and called the investigation a pretext to pressure the central bank to lower interest rates.

If Warsh has not been confirmed by the Senate in time for the Fed’s June 16–17 meeting, Powell would continue to lead the rate-setting Federal Open Market Committee.

“If my successor is not confirmed by the end of my term as chair, I would serve as chair pro tem until he is confirmed. That is what the law calls for,” Powell said.

“On the question of whether I will leave while the investigation is ongoing, I have no intention of leaving the board until the investigation is well and truly over with transparency and finality.”

The surge in oil prices triggered by the war in Iran is increasingly becoming a major concern for global central banks, which are closely monitoring the potential economic and financial consequences of the shock.

More than a week of conflict in the Middle East has disrupted energy supply routes and pushed crude prices sharply higher, raising fresh fears about inflation. For policymakers already grappling with fragile economic conditions, the oil spike presents a complex policy dilemma.

Historically, oil shocks have posed a difficult challenge for central banks. Rising energy prices can drive inflation higher while simultaneously weakening consumer spending and business activity by raising costs. In such circumstances, policymakers face an uncomfortable choice: tighten policy to control inflation or ease financial conditions to support economic growth and employment.

The current situation could potentially produce both outcomes at once, creating a scenario where inflation rises even as economic demand weakens a combination that complicates monetary policy decisions.

Inflation Versus Economic Growth

Central banks traditionally respond to inflationary pressures by raising interest rates or maintaining tighter monetary policy. Some policymakers argue that responding quickly to inflation triggered by an oil shock can prevent inflation expectations from becoming entrenched and reduce longer-term economic damage.

Others, however, advocate “looking through” temporary energy-driven price spikes, arguing that aggressive tightening could unnecessarily damage economic growth. This approach gained prominence after the pandemic, when many central banks initially viewed inflation as temporary a judgment widely criticised in hindsight.

The decision facing policymakers now depends on several uncertainties, including how long the conflict lasts, how severely energy supplies are disrupted, and whether governments intervene with subsidies or price caps to protect consumers.

Given these unknowns, many central banks may prefer to adopt a cautious approach, waiting to see how markets and economic conditions evolve before making significant policy adjustments.

Financial Stability Risks Enter the Picture

Beyond inflation and growth concerns, central banks must also consider a third responsibility that has gained prominence since the global financial crisis: financial stability.

Senior policymakers worry that the oil shock could expose vulnerabilities that have been building in global financial markets for years. A large macroeconomic disturbance involving energy prices, inflation, interest rates and currency volatility could trigger a broader financial stress event.

Much of the concern centres on the growing role of “shadow banking” institutions, financial intermediaries operating outside traditional banking regulation. These entities have become increasingly important providers of credit to companies and governments.

One major area of focus is the rapid expansion of private credit funds, which now manage more than $3 trillion globally. These funds allow asset managers to lend directly to businesses, often outside the scrutiny of public markets or traditional banking standards.

Regulators worry that during a major shock, investors could rapidly withdraw funds from these vehicles, potentially creating liquidity problems for borrowers and spillover risks for banks that help finance or manage the funds.

Pressure in Bond and Repo Markets

Another major source of concern lies in government bond markets, where highly leveraged hedge funds have become increasingly active. Many of these funds use repurchase agreements, or “repo” markets, to borrow money and finance large trades involving government bonds.

These strategies often rely on exploiting small price differences between cash bonds and futures contracts, but they involve substantial leverage. While such activity can help smooth government financing, it can also create systemic vulnerabilities during periods of market stress.

The Financial Stability Board, which monitors risks to the global financial system for the G20, warned earlier this year that sudden deleveraging in repo markets could disrupt sovereign bond markets.

More than $16 trillion in repo transactions backed by government bonds were outstanding last year, with about 60% concentrated in the United States. A sudden withdrawal of leveraged investors could therefore have significant ripple effects across global financial markets.

New Fragilities: Stablecoins and Technology Stocks

Regulators are also monitoring emerging risks linked to digital finance. Stablecoins cryptocurrencies pegged to traditional currencies such as the U.S. dollar have grown rapidly and are increasingly investing reserves in government bonds.

With the stablecoin market now worth roughly $300 billion and expanding, any loss of confidence in these assets could trigger large-scale sales of the bonds that back them. Such an event could add stress to already volatile financial markets.

At the same time, some investors remain concerned about high valuations and heavy market concentration in the rapidly growing artificial intelligence sector, which could amplify market volatility during periods of economic uncertainty.

Analysis: Oil Shock Could Trigger Wider Financial Stress

The Iran war oil shock illustrates how geopolitical crises can interact with financial vulnerabilities to create broader economic risks.

Higher energy prices directly increase inflation and strain household finances. At the same time, they can force central banks to reconsider interest-rate policies, potentially leading to higher borrowing costs and greater volatility in financial markets.

Such conditions could expose weaknesses in highly leveraged sectors of the financial system, particularly in shadow banking, hedge funds and digital financial markets.

Although previous shocks including the economic turmoil following Russia’s invasion of Ukraine did not ultimately trigger a major financial crisis, policymakers remain cautious. The brief turmoil in the U.S. regional banking sector in 2023 demonstrated how quickly financial stress can emerge when economic conditions shift.

If oil prices remain elevated and central banks are forced to respond aggressively, the resulting tightening of financial conditions could amplify existing vulnerabilities across markets.

For now, the disturbances appear manageable. But the combination of geopolitical conflict, energy market disruption and financial fragility ensures that central banks will continue to watch the situation with increasing concern.

With information from Reuters.