By David Lawder

WASHINGTON (Reuters) -The World Bank on Monday named 15 chief executive officers including financiers and asset managers to a group launched by the lender’s president, Ajay Banga, aiming to marshal more private capital to combat climate change and boost investment in developing countries.

The “Private Sector Investment Lab” will begin work in the coming weeks, initially focusing on expanding financing for the transition to renewable energy and associated infrastructure, the bank said in a statement released at a climate meeting in Britain attended by U.S. President Joe Biden and King Charles.

Banga announced the initiative at a global finance summit in Paris last month alongside Mark Carney, the U.N. special envoy on climate action, and Shriti Vadera, chair of Prudential Plc. Monday’s announcement identified other participants.

The World Bank and the CEOs will work “to develop, test, implement and ultimately scale financing structures that can most effectively mobilize private capital,” Carney said in a statement.

The other CEOs are: Thomas Buberl of AXA; Larry Fink of BlackRock; Noel Quinn of HSBC; Shemara Wikramanayake of Macquarie; Hironori Kamezawa of Mitsubishi UFJ Financial Group; Hendrik du Toit of Ninety One; Jessica Tan of Ping An Group; Feike Sijbesma of Royal Philips; Sim Tshabalala of Standard Bank; Bill Winters of Standard Chartered; Damilola Ogunbiyi of Sustainable Energy for All; Natarajan Chandrasekaran of Tata Sons; Dilhan Pillay Sandrasegara of Temasek; and Mark Gallogly of Three Cairns Group.

“Results won’t come overnight, but if successful, this group has the potential to unlock significant investment that will deliver jobs and better quality of life for people living throughout the Global South – the surest way to drive a nail into the coffin of poverty,” Banga said.

Banga, the former Mastercard CEO who took office in June, is working to boost the World Bank’s lending resources to expand its work beyond traditional development projects to tackle climate change, pandemics and other global challenges.

He said in a statement that the Private Investment Lab CEOs were a “crucial piece of the puzzle” to devise ways to pull more private sector investment into the intertwined challenges of poverty, climate and fragility.

(Reporting by David Lawder; Editing by Will Dunham and David Gregorio)

By Kanishka Singh

WASHINGTON (Reuters) -The U.S. Justice Department on Monday sought to block a judge’s order that barred some federal agencies and officials from communicating with social media firms about moderating content on their platforms in a decision stemming from a Republican-backed lawsuit against President Joe Biden’s administration.

The department asked the New Orleans-based 5th U.S. Circuit Court of Appeals to issue a stay of the order last week by Louisiana-based U.S. District Judge Terry Doughty.

Federal agencies including the Department of Health and Human Services and the FBI cannot talk to social media companies for “the purpose of urging, encouraging, pressuring or inducing in any manner the removal, deletion, suppression or reduction of content containing protected free speech,” Doughty ruled.

The judge’s preliminary injunction marked a win for the Republican attorneys general of Louisiana and Missouri, who had accused the administration in a lawsuit of unlawfully using the COVID-19 pandemic and the threat of misinformation to curb views that disagreed with the government. Doughty was appointed by Republican former President Donald Trump.

The order referred to speech protected by the U.S. Constitution’s First Amendment, which bars the government from “abridging the freedom of speech.”

The Justice Department in a filing sought a stay pending its appeal of the judge’s preliminary injunction.

Doughty’s order specifically mentioned certain officials including Department of Homeland Security Secretary Alejandro Mayorkas and Jen Easterly, who heads the Cybersecurity and Infrastructure Security Agency.

U.S. officials have said that in contacting social media companies they were aiming to tamp down misinformation about American elections and about COVID vaccines to curb preventable deaths.

“The injunction threatens to chill this wholly lawful conduct, and to place the Judiciary in the untenable position of superintending the Executive Branch’s communications. It raises grave separation-of-powers concerns,” the Justice Department filing said, referring to the Constitution’s division of powers among the executive, legislative and judicial branches of the U.S. government.

The judge’s order made some exceptions for communications between government officials and the companies, including to warn about risks to national security and about criminal activity.

(Reporting by Kanishka Singh in Washington; editing by Will Dunham and Mike Scarcella)

By David Shepardson

(Reuters) -The United Auto Workers union said on Monday it will open contract talks with Detroit’s Big Three automakers starting on Thursday, ahead of the mid-September expiration of the current four-year labor deal.

The union said talks will open on Thursday with Chrysler-parent Stellantis, on Friday with Ford Motor and on July 18 with General Motors on agreements covering about 150,000 U.S. workers.

UAW President Shawn Fain has said repeatedly that the UAW wants to eliminate the two-tier wage system under which new hires earn as much as 25% less than veterans. He has also said the union will push to restore pay improvements tied to the cost of living and to retiree benefits cut during the 2008-2009 Great Recession.

In a break with tradition, the UAW will forgo the traditional media event of shaking hands with company executives to mark the formal opening of talks. Instead, UAW leaders will meet with auto workers on Wednesday at three Detroit-area plants to mark the beginning of talks.

“I’ll shake hands with the CEOs when they come to the table with a deal that reflects the needs of the workers who make this industry run,” Fain said in a statement on Monday.

Detroit’s automakers have doubled down on cutting costs, saying it will help fund an accelerated transition from gasoline-powered vehicles to electric vehicles.

Analysts have said the automakers face billions of dollars in losses on EVs over the next several years, as they replace high-volume combustion vehicles with low-volume EVs powered by expensive batteries.

On Monday, GM said it has “a long history of negotiating fair contracts with the UAW that reward our employees and support the long-term success of our business” and said its “total compensation package … is one of the best in the industry.”

Ford CEO Jim Farley said in an opinion piece published in the Detroit Free Press last week that “success in this new world will require us to adapt. Some jobs will be disrupted, and some will be created.” Late last month, Ford had another round of salaried-worker job cuts.

UAW Vice President Chuck Browning said in a response to Farley on Monday that hourly workers have received “unfairly disproportionate” pay.

The UAW in May said it was not yet endorsing U.S. President Joe Biden for re-election, citing his policies on EVs. Fain called a Biden administration plan to lend $9.2 billion to a joint venture of Ford and South Korea’s SK On to build three U.S. battery plants a massive “giveaway” with “no consideration for wages, working conditions, union rights or retirement security.”

The White House said it has named adviser Gene Sperling as a “point person” on the UAW automaker labor talks.

(Reporting by David Shepardson in WashingtonEditing by David Gregorio and Matthew Lewis)

By Pete Schroeder

WASHINGTON (Reuters) – The Federal Reserve’s top regulatory official laid out a sweeping plan to increase capital requirements for the nation’s largest banks in the wake of recent bank failures, a move that was immediately met with criticism from the industry.

In a widely-anticipated speech, Fed Vice Chair for Supervision Michael Barr said he planned to pursue multiple regulatory initiatives that would direct larger banks with more than $100 billion in assets to hold more in reserve, saying the recent bank failures underlined the need for regulators to bolster resilience in the system.

“Events over the past few months have only reinforced the need for humility and skepticism, and for an approach that makes banks resilient to both familiar and unanticipated risks,” Barr said in a speech at the Bipartisan Policy Center in Washington.

Barr had been expected to prescribe tighter rules on the sector since being tapped by President Joe Biden to serve as the Fed’s bank watchdog. But Monday’s remarks marked the most detailed view yet of his agenda, and confirmed industry fears he would pursue a broad set of tighter requirements and also ignore their pleas for relief in some areas.

The banking industry called the effort misguided and could hinder lending.

“The changes he outlined today fail to adequately consider the negative repercussions from forcing banks of all sizes to hold more capital than is needed to maintain safety and soundness. Higher capital requirements come at a cost to the economy, and regulators have other existing regulatory tools to manage risks,” said Rob Nichols, president and CEO of the American Bankers Association.

The nation’s largest bank lobby said it would oppose any proposals it deemed unnecessary and economically harmful.

Barr said he did not plan to overhaul the U.S. bank capital framework, but instead build on it in several ways, including by fully implementing the globally agreed Basel bank capital agreement and expanding annual “stress tests” of banks’ health. He did not offer a specific timeline for any changes, but the effort is expected to kick off in the coming weeks.

‘HOLISTIC REVIEW’

Barr’s speech served as a comprehensive update on a “holistic” review of bank capital rules that he launched shortly after joining the U.S. central bank in 2022. He had already indicated at the time that he was considering where rules might be strengthened, but now argues the banking crisis in March and April, which saw the failure of Silicon Valley Bank (SVB) and two other lenders, underlined the need to do more.

“The holistic review began well before then, of course, and the steps proposed here address shortcomings in capital standards that did not begin in March of 2023,” he said. “But in an obvious way, the failures of SVB and other banks this spring were a warning that banks need to be more resilient.”

Specifically, Barr said the crisis proved the systemic role smaller banks can play, which means they also should face stricter oversight. He said he will seek to apply stricter capital rules to banks with more than $100 billion in assets, expanding the pool of firms that must comply.

The banks which would qualify, according to Fed data, include Citizens Financial Group, Fifth Third, Huntington and Regions. The banks did not immediately respond to requests for comment. The stock prices of the first three firms were down at least 0.3% in midday trading Monday, while Regions was up 0.3%.

Dashing industry hopes for any rules relief, Barr also said he did not plan to weaken an existing surcharge on large global banks or leverage rules which the industry argued hampered Treasury market functions. Barr said evidence of that is “inconclusive,” and any impact should be reduced when a fuller set of rules in is place.

However, Barr did emphasize that any new requirements would go through a formal rule-writing and public comment process, and include lengthy transition periods to allow banks to raise necessary capital.

He said that most banks already have enough capital to meet the new standards he has envisioned, but firms that must raise capital would be able to do so in less than two years of retained earnings, while maintaining their investor dividends.

The Fed has itself come under criticism for its oversight of banks involved in this year’s banking crisis. The Republican-led U.S. House of Representatives Oversight Committee on Monday asked Fed Chair Jerome Powell to hand over confidential documents related to the U.S. central bank’s supervision of failed Silicon Valley Bank.

Barr also said on Monday the Fed is close to reaching the appropriate level of interest rates to bring inflation back to its 2% target but “we still have a bit of work to do.”

(Reporting by Pete Schroeder; Editing by Mark Porter, Emelia Sithole-Matarise, Paul Simao and Nick Zieminski)

By Ann Saphir and Michael S. Derby

(Reuters) -The Federal Reserve will likely need to raise interest rates further to bring down inflation that is still too high, but the end to its current monetary policy tightening cycle is getting close, several U.S. central bank officials said on Monday.

The Fed has raised interest rates by 5 percentage points since March 2022 to bring down the highest U.S. inflation in four decades. Fed policymakers opted last month to forego a rate increase to give themselves time to assess the still-developing effects of the previous hikes in borrowing costs, even as most also penciled in at least two more increases by the end of 2023.

“We’re likely to need a couple more rate hikes over the course of this year to really bring inflation” sustainably back to the U.S. central bank’s 2% goal, San Francisco Fed President Mary Daly said during an event at the Brookings Institution, giving voice to the most common view among her rate-setting peers at the Fed.

But, Daly added, while the risks of doing too little are still greater than those of overdoing it on rate hikes, the two sides are getting into better balance as the Fed nears “the last part” of its hiking cycle.

Daly said she fully supported June’s policy decision, along with a go-slower approach that allows for more “extreme” data-dependence. “We may end up doing less because we need to do less; we may end up doing just that; we could end up doing more. The data will tell us.”

Fed policymakers are widely expected to deliver a rate hike at their meeting later this month, a move that would bring the policy rate to the 5.25%-5.50% range.

What’s less clear is whether they will raise rates again at the September meeting, wait until November, or just stay on hold and let inflation ease over time.

Fed Chair Jerome Powell has said he cannot rule out consecutive rate hikes to deal with stubbornly high inflation, which by the central bank’s preferred gauge, the personal consumption expenditures index, has fallen from a peak of 7% last year to 3.8% in May, still nearly twice the Fed’s target.

“We still have a bit of work to do,” Fed Vice Chair for Supervision Michael Barr said on Monday at a separate event. “I’ll just say for myself, I think we’re close.”

NEAR-TERM INFLATION EXPECTATIONS FALL

A survey released on Monday by the New York Fed on the state of consumer expectations in June showed near-term inflation expectations dropped to their lowest level since April 2021. That could buttress the case that price pressures are weakening, which in turn could take some pressure off the central bank to hike rates again. But the survey also showed a fifth straight month of expected home price gains, suggesting that housing inflation could again become an issue for the Fed at some point.

Atlanta Fed President Raphael Bostic, speaking at yet another event on Monday, repeated his view that the Fed can be “patient” on rates and allow restrictive policy to bring down inflation without further action by the central bank.

But within the Fed there remains a camp that feels just the opposite.

Commenting on last month’s policy meeting, Cleveland Fed President Loretta Mester told reporters, “if it was just me alone, I would have moved the rates up, but I understood the rationale for not moving in June,” given the importance of matching market expectations.

Mester, who does not have a vote on the Fed’s policy-setting committee this year, reaffirmed her view that interest rates will need to rise but was not yet ready to say that should happen at the July 25-26 meeting, as more data on the economy is inbound. Mester also said her outlook for rates is in line with or slightly above the Fed consensus of half a percentage point more of additional tightening before the end of the year.

Mester, however, said higher rates will be needed because “the economy has shown more underlying strength than anticipated earlier this year, and inflation has remained stubbornly high, with progress on core inflation stalling.”

(With reporting by Dan Burns and Howard Schneider; Editing by Paul Simao)

By Lawrence Delevingne and Nell Mackenzie

(Reuters) -Wall Street stocks rose slightly on Monday, while oil prices and the dollar dipped, as investors digested Chinese economic data and looked ahead to a key U.S. inflation report and corporate earnings.

U.S. stocks gained modestly. The Dow Jones Industrial Average rose 0.62%, the S&P 500 gained 0.24%, and the Nasdaq Composite added 0.18%. European shares inched higher on Monday with the travel and leisure sector leading gains. The pan-European STOXX 600 index finished up 0.18%.

Chinese consumer price figures fell in June, leaving them almost unchanged from a year earlier, while producer prices slid deeper into negative territory.

The weakness implies scope for further monetary policy easing, but also underlines the challenge China faces in reflating its economy and avoiding a deflationary spiral.

“China is just a symptom. We see weaker growth around the world because of the effect of higher interest rates,” said Matthias Scheiber, global head of multi-asset portfolio management at Allspring Global Investments in London.

Citigroup on Monday downgraded U.S. stocks in anticipation of a pullback in growth equities and a recession in the fourth quarter of the year, while betting on beaten-down counterparts in Europe with an upgrade.

The brokerage cut its rating on U.S. stocks to “neutral” from “overweight” after a strong rally in the first half of the year. It warned that growth stocks were set for a pullback as the “euphoria” around artificial intelligence enters a more “digestive” phase.

The earnings season starts this week with JPMorgan, Citi, Wells Fargo, State Street and PepsiCo among those reporting.

CPI SLOWDOWN

U.S. consumer prices are expected on Wednesday to show headline inflation slowed to its lowest since early 2021 at 3.1%, down from 9.1% a year earlier.

Separately, U.S. wholesale inventories were unchanged in May after declining for two straight months, suggesting inventory investment could support economic growth in the second quarter.

“Markets are coming around to our view that central banks will be forced to keep policy tight to curb inflationary pressures,” BlackRock Investment Institute strategists wrote in a note Monday. “Stubbornly high U.S. CPI inflation data this week could bolster the recent bond yield surge as markets expect the Fed to hike rates.”

Markets still think the Federal Reserve is likely to hike rates this month, but a weak CPI might lessen the risk of a further move in September.

Currently futures imply around a 90% probability of a rise to 5.25%-5.5% this month, up 25 basis points.

The Fed will likely need to raise rates further to bring down inflation, but the end to its current monetary policy tightening cycle is getting close, several U.S. central bank officials said on Monday.

“I think we’re close,” said Michael Barr, Fed Vice Chair for Supervision.

Markets have also priced in higher rates in Europe and the UK. Canada’s central bank meets this week and markets imply a 69% chance of another hike.

The risk of higher global rates for longer has caused havoc in bond markets, where U.S. 10-year yields jumped 23 basis points last week, German yields rose 24 basis points and UK yields leapt 26 basis points. The yield on 10-year U.S. notes fell 4 basis points on Monday to 4.008%.

U.S. two-year yields last stood at 4.870%, having hit a 16-year high of 5.12% last week.

The dollar sank to around a three-week low against the yen on Monday as investors continued to price in expectations that the Federal Reserve is near the end of its tightening cycle.

The dollar index dipped 0.3%, while the euro was up 0.3%, and the pound rose 0.16%.

In commodity markets, gold was little changed after making a slight gain last week. [GOL/]

Oil prices declined on Monday after weak economic data from top consumers the U.S. and China, although expected crude supply cuts from Saudi Arabia and Russia limited losses. [O/R]

U.S. crude fell 0.9% to $73.18 per barrel and Brent was at $77.86, down about 0.8% on the day.

(Reporting by Lawrence Delevingne in Boston and Nell Mackenzie in London; Editing by Mark Heinrich, David Evans, Will Dunham and Christina Fincher)