North America
CNBC Economy

Kevin Warsh has homed in on three key phrases. How Fed watchers interpret them

He's not quite at the level of obscurity of former Federal Reserve Chairman Alan Greenspan, but new Fed chief Kevin Warsh has settled on a few phrases that are notable for their repetition and lack of clarity. In five public appearances, starting with his nomination hearing in April, through his first press conference, roundtable in Portugal and two congressional testimonies, Warsh has used the phrase "family fight" 13 times, returning to "first principles" 11 times and "inflation is a choice" for the Fed six times. But what those phrases mean for monetary policy is more challenging than counting their usage. Yet, with a chairman who has decided to say less than his predecessors, there's a premium on understanding the words he does choose. CNBC asked five close Fed watchers their views on what these three phrases mean to them. "If Chair Warsh encourages more open debate around policy and creates an environment where prevailing assumptions can be challenged rather than simply accepted, that should ultimately lead to better policymaking. The benefit is less about changing the outcome of any individual meeting and more about improving the quality of the decision-making process over time." "Ensuring the environment at the [Federal Open Market Committee] meeting allows for all views/arguments to be heard. I note that this was already the atmosphere when I was on the FOMC. I never felt constrained in what I said or the policy case I argued. In reality, it is 19 people around the table so there has to be some order or else maybe it is only the loudest voice in the room that gets heard and you will actually have fewer views expressed since it will be hard to jump in." "FOMC meetings tend to be highly scripted affairs, with prepared remarks read aloud and limited conversation. Warsh wants a livelier back-and-forth — a style he is more comfortable with. The format is unlikely to affect the policy decision, and 19 participants is a large group for a free-for-all conversation. " "To Kevin, this is his aphorism for the natural debate going on inside the FOMC and the Board. It implies obvious disagreements, but like all 'family fights' is best kept to members of the family and not revealed too much to the public. I think it's the second part that his committee colleagues (and market participants) are finding problematic, and doesn't fit the priors. Members of the committee are clearly willing to disagree in public, or at least state their opinions much more openly (than Chairman Warsh). It's also a way of deflecting his responsibility from external pressure (POTUS, CONGRESS, MARKETS)." "I guess the family fight is him trying to be folksy, but it doesn't depart from the tradition under [Ben] Bernanke of (publicly) welcoming dissenting opinions." "This is vague enough to mean whatever Warsh wants it to mean, but in context, it appears to be the basis for the decision making and structural reform he is manifesting. Over the summer (in Sintra) he said his Central Banking leadership colleagues shared a 'willingness to go back to first principles' as he questioned the whole process of monetary policy making. I'd think his re-introduction of the monetary aggregates, his cute "monetary policy should have something to do with money," is cut from the same general cloth as 'first principles.' Sadly, the science of monetary policy and other workhorses of monetary policy (The Phillips Curve), economic forecasting even appear to be unhelpful in Warsh's first principled approach. He's not been shy about slamming the year-after-year misses in inflation and blaming [Jerome] Powell and company. The low level of interest rates, the balance sheet, the failure to tighten sooner, FAIT and so on, all of that (to Warsh) was a departure from 'first principles.'" "'First principles' is code for 'question everything.' Warsh has said repeatedly that he wants "regime change" at the Fed and questioning the basic assumptions of how monetary policy is done fits that agenda. I am skeptical that Warsh will be able to rewrite first principles. Showing that an assumption is flawed is not enough; it requires offering a better replacement. Even with his task forces, Warsh is likely to come up short on new first principles — no regime change in monetary policy, but some incremental improvements to how it's done." "Rethink the way the Fed goes about achieving its dual mandate goals of price stability and maximum employment without preconceived notions or assumptions, or precluding approaches because they may differ from the current approach. Think first about what the best approach is for communications, inflation and labor market assessment, balance sheet and operating framework, and data sources. Then consider how to transition to these new approaches."

Kevin Warsh has homed in on three key phrases. How Fed watchers interpret them
North America
CNBC Finance

Senate panel advances China auto bill that could bar Mercedes-Benz from U.S.

The Senate Commerce Committee advanced bipartisan legislation Wednesday aimed at toughening a ban on Chinese automakers from the U.S. market, even as Chairman Ted Cruz, R-Texas, warned that it could unintentionally bar Mercedes-Benz from selling vehicles in the country. Cruz said during the committee's markup of the Motor Vehicle Modernization Act of 2026 that the bill's 15% Chinese ownership threshold would cover Mercedes-Benz because two Chinese investors collectively own nearly 20% of its shares. "We would never consider" banning Mercedes-Benz, Cruz said, adding that the bill would need to be changed before becoming law. Mercedes-Benz's two largest individual shareholders are Chinese state-owned automaker BAIC, formerly the Beijing Automotive Industrial Corp., with a 9.98% stake, and Geely founder Li Shufu, with 9.69%. The bill would codify federal restrictions intended to keep Chinese-linked vehicle technology out of the U.S. over national security concerns that connected cars could collect sensitive data. "We're preventing an absolute, total, and complete destruction of our industrial base," said Sen. Bernie Moreno, R-Ohio, who introduced the bill with Sen. Elissa Slotkin, D-Mich. Mercedes-Benz previously declined to comment on the legislation but said it employs more than 10,000 people in the U.S. and operates assembly plants in Alabama and South Carolina. Moreno said during the markup that Mercedes-Benz would have until 2030 to comply with the ownership limit and could seek a waiver. During the markup, Cruz also accused General Motors of supporting the provision in an effort to weaken Mercedes-Benz and make Cadillac more competitive. "GM is pushing for this provision to get Mercedes-Benz out of the market," Cruz said. GM and Mercedes-Benz did not immediately respond to requests for comment. GM is the top-selling automaker in the U.S. Get this delivered to your inbox, and more info about our products and services.

Senate panel advances China auto bill that could bar Mercedes-Benz from U.S.
North America
CNBC Finance

GM beats on earnings, raises guidance amid 'resilient' consumer, pricing

DETROIT — General Motors raised several key 2026 earnings forecasts Tuesday after beating Wall Street's second-quarter expectations as the automaker's North American operations continue to drive its results. The Detroit automaker attributed its guidance change to consistent vehicles transaction prices, lower warranty costs and narrowing all-electric vehicle losses as it wraps up a multibillion-dollar pullback in EVs. "These results are very consistent with what we've been doing for the last several years," GM CFO Paul Jacobson said Tuesday during CNBC's "Squawk Box." "Our first half earnings per share is 25% higher than the first half at any time in our history." Jacobson said GM's "momentum is palpable," while referring to the company's stock as a "bargain" at roughly $75 a share, up more than 40% compared to a year ago. He described the company's consumer demand as "resilient." The raised guidance includes full-year adjusted earnings before interest and taxes of between $14 billion and $16 billion, or $12 and $14 adjusted EPS, up from previous guidance of $13.5 billion to $15.5 billion, or $11.50 and $13.50 adjusted EPS, previously. It also raised its expectations for adjusted automotive free cash flow to $9.5 billion to $11.5 billion, up from $9 billion to $11 billion. The Detroit automaker, however, lowered its expectations for net income attributable to stockholders to be between $8.4 billion and $9.8 billion, down from a previously lowered guidance of between $9.9 billion and $11.4 billion. This is the second consecutive quarter GM has lowered its net income attributable to stockholders guidance while raising other forecasts. In April, GM altered its guidance to reflect a $500 million tariff rebate. The company's North American operations led GM's results, which also include expanding its digital services revenue by 20% and improving its EV losses by between $1 billion to $1.5 billion this year compared with 2025. "Our 8.6% EBIT-adjusted margin in North America was up 2.5 points from a year ago, and we continue to lower our warranty costs, reduce EV losses, and increase operating efficiency. In addition, GM International, inclusive of our China joint ventures, was profitable," GM CEO and Chair Mary Barra said in a letter to shareholders. Barra also noted consistent vehicle pricing and a "very attractive lineup" of pickup trucks and SUVs contributed to its results. The automaker said its average vehicle transaction price was $52,000 during the quarter as it remains disciplined regarding incentives. The company said Tuesday it has "substantially" completed material charges involving its pullback in all-electric vehicles, which have included $10.9 billion in EV-related charges since the second half of last year. GM on Tuesday said it has paid $4.5 billion of an expected $7.2 billion in cash charges related to its EV pullback through the second quarter.

GM beats on earnings, raises guidance amid 'resilient' consumer, pricing
Europe
BBC Business

Ryanair profits drop as Iran war puts off passengers and lifts fuel costs

Image source, Getty ImagesByEmer MoreauBusiness reporterPublished20 July 2026, 08:26 BSTUpdated 1 hour agoRyanair's profits have fallen sharply as war in the Middle East sent jet fuel prices soaring and customers reluctant to book flights. The Irish airline's pre-tax profits dropped 34% to €593m (£503m) between April and June while sales were flat as the company was forced to cut fares to stimulate demand. Ryanair also said it expects summer fares to be slightly lower than last year due to "consumer hesitancy" around air travel. The price of fuelling a plane has jumped since the US and Israel launched strikes against Iran in February and while Ryanair said it had "hedged" or struck deals for the most future fuel costs, those not included in these arrangements had more than doubled. Crude oil prices hit $90 (£67) a barrel for the first time in a month on Monday, before falling back slightly, after a weekend of intense exchanges of fire between the US and Iran. Traffic through the Strait of Hormuz — an essential route for global oil and gas supplies — has ground to a halt. An interim peace deal last month brought some respite to oil and energy prices, but they spiked again as negotiations broke down and fighting resumed. The airline warned that its results for the year will be "highly sensitive" to external factors such as conflict escalation in the Middle East and Ukraine as well as the price of unhedged jet fuel. Fares for for the key summer period between July and September are on track to be "modestly" lower than last year, with many passengers booking closer to departure than normal. The firm's finance chief, Neil Sorahan, said flights on its popular Mediterranean routes were still full. "People [are] as keen to get away as ever, albeit booking just a little bit later," he said. While passenger numbers rose 6% to 6.1 million- helped by the Easter holiday in April - fares fell by 6% as the airline reduced fares to entice flyers concerned about the Iran war. Russ Mould, investment director at AJ Bell, said Ryanair was in a better position than many of its rivals, but nonetheless "visibility is worse than San Francisco airport when the fog sets in".

Ryanair profits drop as Iran war puts off passengers and lifts fuel costs
Europe
BBC Business

Google burning through cash with spiralling AI costs

Google parent Alphabet saw its business continue to grow in recent months, yet growing spending on artificial intelligence (AI) infrastructure put its leftover cash into negative territory. The company's free cash flow, the cash it maintained after paying for operations and investments, came in at negative $5.9bn (£4.3bn) for the first time in at least a decade, according to its past financial records. Alphabet's spending on AI is now expected to hit as much as $205bn this year, an increase from $190bn, as major tech companies race to build around a new wave of the technology. Meanwhile, Alphabet's combined quarterly revenue hit $119.8bn, up 23% compared with the same time last year. Anat Ashkanazi, Google's chief financial officer, noted on a call with financial analysts that the company had shown negative free cash flow due to growing capital expenditures, essentially all of which was related to AI spending. She said the company spent $45bn in the second quarter, with 60% of the cost going towards servers and the remaining 40% going towards data centres. Ashkanazi said on the call that when it comes to AI, "the demand still outpaces that investment". "As long as we see these attractive opportunities to invest, we will continue to invest." Sundar Pichai, Google's chief executive, said that the technological shift to AI tools and capabilities still "feels like early innings in a shift across multiple areas" and that the company's plans around generating financial returns on its spending were "disciplined". "What I see with what you can do with frontier capabilities, there is still a lot of work left to do to translate that into experiences for our users. So that looks like extraordinary opportunities with extraordinary returns." Rachel Winter, a partner at the wealth management firm Killik & Co, said there was a bit of surprise among investors about how much Google was spending. "They said that this year the total they will spend will be between $195bn and $205bn. So these are huge numbers. And I think the fact that the shares dropped about 3.5% in after-hours trading when the results came out, that suggests there is a little bit of concern about those levels."

Google burning through cash with spiralling AI costs
Europe
BBC Business

Firm hacked by rogue OpenAI models says it is 'a wake-up call'

The co-founder of Hugging Face, a technology start-up that was hacked after some of OpenAI's most advanced artificial intelligence (AI) models went rogue, said on Thursday that the incident is "a wake-up call" for the industry. Thomas Wolf told BBC's Newsday radio programme that "this will be one of the most common types of cyber attacks we see", but that most firms are not aware that the "game has changed". The ChatGPT-maker said on Tuesday that its AI models broke out of a secure test environment during a trial and launched a cyber attack. The firm said the incident was "unprecedented" and that it was conducting an investigation with Hugging Face. AI agents are able to operate alone to accomplish tasks after human instruction. Wolf said that Hugging Face initially had no idea where the attack originated when signs of it surfaced in mid-July but that the company was able to contain the breach. Hugging Face is one of the world's largest open-source hubs for sharing AI models and is often used by tech developers and researchers. Wolf said the breach was "very different" from the usual cyber attacks that Hugging Face often faces and that OpenAI quickly informed the company that its models were behind the hack. In a "very short time" there were 17,000 attacks on Hugging Face's network from various IP (Internet Protocol) addresses, said Wolf, who is also the firm's chief science officer. Wolf said it was a warning to other companies that they must strengthen their cybersecurity defences to counter such attacks. The hack is "worrying" because it suggests OpenAI's models ignored the typical safeguards that would prevent an AI program from committing a cyber attack, said Nate Soares from the Machine Intelligence Research Institute. "In some sense, it knew that this was not what the creators intended. It just didn't care," he added. A UK government spokesperson said the country's AI Security Institute was studying how the AI system behaved in the incident and that it was continuing to work with OpenAI and other labs to strengthen safeguards.

Firm hacked by rogue OpenAI models says it is 'a wake-up call'
Europe
The Guardian

Tesla’s profits slide despite growing revenue as it pivots to robotics and AI

Tesla cars on the lot at the factory in Fremont, California. Photograph: Justin Sullivan/Getty ImagesView image in fullscreenTesla cars on the lot at the factory in Fremont, California. Photograph: Justin Sullivan/Getty ImagesTeslaTesla’s profits slide despite growing revenue as it pivots to robotics and AI Shares in Elon Musk company fall more 3% in after-hours trading, as earnings per share miss Wall Street expectations Tesla reported its second-quarter earnings on Wednesday, disclosing far lower profits than expected. The company’s already beleaguered stock, which had fallen about 14% this year to date, dipped further following the earnings report. Elon Musk’s automaker, once the pinnacle of his tech empire, has taken a back seat to SpaceX. Musk’s rocket and AI company held the largest stock market debut in history last month, turning the richest man on Earth into the world’s first trillionaire, though his net worth has since fallen from its peak. Tesla revealed earnings of 31 cents per share, a measurement of profits divided by the number of outstanding shares, less than the 51 cents per share Wall Street predicted. Its revenue was $28.23bn against an expected $25.71bn. Shares in the company fell over 3% in after-hours trading immediately after the numbers were released. Last year’s second-quarter earnings were equally shaky. SpaceX and Tesla stock has slumped this year, with the rocket company down about 26% since its debut. Tesla has, meanwhile, suffered from the end of electric vehicle tax subsidies in the US last year and increased competition from cheaper Chinese automakers. Although Tesla missed revenue expectations in its last quarterly earnings report, the company revealed earlier this month that it exceeded Wall Street’s predictions for its second-quarter auto sales. The stark turnaround was driven largely by sales in Europe, where electric vehicle subsidies are still in place and gas prices have surged as a result of the US-Iran war, leading consumers to buy electric. Tesla’s vehicle sales are no longer as crucial to its market performance as they once were, however, as the company has pivoted towards bets on robotics, autonomous driving and AI. Musk claimed last year that Tesla’s Optimus robot, which has not yet entered widespread production and already faces a slew of Chinese competitors, would be the biggest product of all time and end poverty. On the earnings call, Musk once again claimed that Optimus would be the “biggest product ever”, but cautioned that it faced a number of hurdles given the technological advancements it would require and the difficulties of scaling its production. “It’s one of the hardest things to solve to make an autonomous human robot that can do tasks,” Musk said. The company’s driverless taxi service, Robotaxi, has become a major focus for Tesla as a potential new line of revenue. Tesla announced earlier in the week that it would add Tampa and Orlando to where Robotaxi can operate. The service is currently available in parts of Austin, Dallas, Houston and Miami. Musk has for years declared that the autonomous driving service will have almost infinite demand and claimed that millions of the self-driving cars would soon be on US roads. As is frequently the case with Musk’s promises, he has failed to reach those lofty targets and rollout has been slow. On Wednesday’s call, Musk suggested that the slow growth was out of an abundance of caution for safety and concern that if a Robotaxi killed someone it would generate negative headlines and a regulatory crackdown.

Tesla’s profits slide despite growing revenue as it pivots to robotics and AI
North America
CNBC Finance

Renting a yacht in the Mediterranean this summer just got cheaper

Yacht companies are offering discounts and special offers on charters in the Mediterranean this summer, as geopolitical conflicts cool demand. Summer charters in the Med are down 20% to 30% from last year, yacht brokers say, with a growing number of yachts offering special discounts for the rest of July and August. The softness has also led to more last-minute bookings by charter clients who are looking for deals. Jonathan Beckett, CEO of superyacht brokerage Burgess, said bookings by Americans for charter yachts in the Med this summer started out strong in the beginning of the year but slowed after the outbreak of the Iran war. "In December, January and February, the market was on fire," he said. "Then the war started." Beckett estimates the summer charter season in the Med may be off 30%. Many Americans are booking at the last minute in hopes of deals. While charter clients typically reserve boats months or even a year in advance, this summer they're looking for quick turnarounds. "People are booking a big yacht on a Monday for a vacation that starts Friday," said Anders Kurtén, CEO of Fraser Yachts. Kevin Merrigan, of Northrop & Johnson, said some clients are calling with a last-minute offer only to find the boats already chartered. "There are a lot of last-minute charters this year and deals to be had," he said. "But people who are waiting until the last minute to book are also finding out the yacht has just been chartered or there's a deal already on the table." Still, brokers said there has been a flurry of mid-summer deals and discounts. The 130-foot "Club M," offered a special rate of 210,000 euros ($239,000) for the third week of July, down from its usual rate of 250,000 euros. Other yachts are offering "rare availability" in late July and August. Beckett said demand for largest boats — those over 70 meters — is the strongest. And while interest for the summer might be slow, he said bookings for September are already up from last year. "People are pushing their vacations to the end of summer in hopes there is resolution in the Middle East," he said. Get this delivered to your inbox, and more info about our products and services.

Renting a yacht in the Mediterranean this summer just got cheaper
Europe
BBC Business

Why the UK is dithering over what to do about e-scooters

ByKaty AustinTransport correspondentWhen I step out of Southampton Central railway station, it takes me just seconds to spot an e-scooter. In this city, these devices have become a normal part of the transport ecosystem, along with e-bikes. "It's just the most convenient way to commute from home to the station and back," says Keith Reed, who I speak to as he arrives at the station to catch a train to London. Keith says uses rental e-scooters twice a week. His alternative option would be his bike, but he'd then have to worry about where to leave it. Around the city, there are parking areas for bright orange rental devices everywhere - but they're not necessarily a permanent feature. Southampton hosts one of the numerous government-backed trials around England. This one has been going on since 2021. It also doesn't take long to find e-scooters which aren't part of the trial, but instead are owned by individuals. I see a man riding one along the pavement outside a parade of shops. He doesn't want to stop and talk. These privately owned e-scooters are illegal to ride on public roads across the UK, but they've proliferated regardless. One expert told me the situation was a "Wild West". Among people I spoke to in Southampton, the same concerns came up time and time again: "They're a blinking nuisance," says elderly pedestrian Fred. Another shopper, Martin, says he's "very concerned" whenever he sees them racing through precincts: "An accident's almost inevitable." The endgame of the trials is to reach a decision on whether to make permanent hired e-scooter schemes such as the one Keith uses - and whether to bring in legislation that would legalise and regulate privately owned e-scooters too. But six years since the trials started around England, there's still no conclusion - and as the UK government has responsibility for road traffic legislation across Great Britain, officials in Scotland and Wales say they are waiting on Westminster to act. So why is it taking so long for the government to decide what to do, and what are the consequences of delay? What does the evidence tell us about how safe these things are? And why are people using them in the first place - are they here to stay as a useful part of the transport offer, or will they end up being viewed as a pest on our streets? You'd recognise an e-scooter if you saw one. The Department for Transport's (DfT's) definition of an e-scooter includes no pedals, two wheels and a maximum continuous power rating of 500W. And so far, the trials around England appear to have proved popular. According to DfT research, fom January 2022 to May 2024, 36.9 million trips were made across 30 trial areas outside of London. On average, nearly 19,500 e-scooters were available to hire every day.

Why the UK is dithering over what to do about e-scooters