EM LATAM CREDIT: LATAM Credit Market Wrap

Bloomberg citing Kyodo:

• "US TO IMPOSE ADDITIONAL 15% TARIFF ON JAPAN IMPORTS: KYODO"
• "US TARIFF ON JAPAN TO COME ON TOP OF EXISTING TARIFFS: KYODO"
• "KYODO CITES WHITE HOUSE OFFICIAL ON TARIFFS" 

US President Donald Trump is shortly due to make an announcement at the White House. LIVESTREAM There was speculation earlier in the day that the announcement could relate to new Russia sanctions or the open positions on the Federal Reserve Board of Governors and the Bureau of Labor Statistics.

• However, it appears the event will focus on a USD$100 billion investment pledge from tech giant Apple, which the White House described as a “significant acceleration” of Apple’s plan for more production in the United States.
• The New York Times notes: "The company said in February that it planned to spend $500 billion and hire 20,000 people in the United States over the next four years and open a factory in Texas to make the machines that power the company’s push into artificial intelligence. The company made similar, smaller pledges during the Biden administration and Mr. Trump’s first term, though it has not yet followed through on some of those promises."

SF Fed President Daly (non-2025/2026 FOMC voter) says in prepared remarks that "we will likely need to adjust policy in the coming months. Recalibrating it to match the collective risks to both of our mandated goals." Recall earlier this week she said in a Reuters interview that the Fed may need to cut more than twice by the end of the year.

• She notes that risks to the dual mandate goals of inflation and employment are "roughly balanced" but she's increasingly concerned about labor market weakness. "The labor market has softened. And I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard."
• "Inflation, absent tariffs, has been gradually trending down, and with a slowing economy and ongoing restrictive monetary policy, should continue to do so... Tariffs will boost inflation in the near term, but likely not in a persistent way that monetary policy would need to offset."
• She characterizes policy adjustments as "Recalibrating it to match the collective risks to both of our mandated goals", suggesting she doesn't see aggressive cuts.