International News 15 August 2025
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Fed Seen Almost Certain to Cut Rates in September Amid Cooling Labor Market
The Federal Reserve is now viewed as nearly certain to cut interest rates at its September 16–17 meeting, with CME FedWatch data showing a 99.9% probability of a 25-basis-point reduction after July CPI data revealed moderate inflation and labor market weakness. Treasury Secretary Scott Bessent suggested a larger 50-basis-point cut may be warranted, citing slowing job growth in recent months and arguing that current rates are too restrictive, ideally lowered by 150–175 basis points. Bessent also backed seeking a replacement for Fed Chair Jerome Powell, as the shortlist of candidates grows to 11 names, including Vice Chair, current governors, and Trump adviser Kevin Hassett. The proposed cuts would take the federal funds rate from 4.25–4.5% to around 3%, closer to the Fed’s “neutral” level that neither stimulates nor restrains the economy. This reflects confidence that inflation is on track toward the 2% target and that the economy can sustain full employment, despite tariff-related price pressures. Some Fed members, including Michelle Bowman, argue for a proactive shift toward neutral to prevent further labor market damage. Analysts at Citi note that limited pass-through of Trump-era tariff costs to consumers should ease inflation concerns and allow for a faster or larger series of cuts starting in September.
Global EV Sales Growth Slows to 21% in July as China Weakens
Global electric vehicle (EV) sales rose 21% YoY in July 2025 to 1.6 million units, slowing from June’s 25% pace and marking the weakest growth since January, Rho Motion data showed. The deceleration was driven mainly by China—accounting for over half of global EV sales—where growth plunged to 12% after the government delayed parts of its 2025 subsidy program for EVs and plug-in hybrids. China sold about 1 million units in July, down sharply from its first-half monthly growth average of 36%. Europe led gains with a 48% surge to roughly 390,000 units, boosted by decarbonization incentives, while North America rose 10% to over 170,000 units. Markets outside the top three regions jumped 55% to above 140,000 units. Rho Motion’s Charles Lester expects Chinese EV sales to rebound from August as new subsidies are released, though US sales may face headwinds later this year due to a tax credit cut set for end-September.
Thailand Cuts Rates to 3-Year Low to Shield Economy from US Tariffs, Weak Tourism
The Bank of Thailand (BoT) reduced its one-day repo rate by 25 basis points to 1.50%—the lowest since late 2022—in its fourth cut in 10 months, aiming to support an economy pressured by US import tariffs, falling prices, and sluggish foreign tourist arrivals. While growth forecasts remain at 2.3% for 2025 and 1.7% for 2026, policymakers warned that US trade policies could worsen structural challenges and hurt competitiveness, especially for small businesses. The central bank signaled a continued accommodative stance and left the door open for further easing if global shocks emerge, with some analysts projecting the rate could fall to 1.00% by early 2026. Exports, Thailand’s key growth driver, surged 15% YoY in the first half of 2025 as exporters rushed shipments before US tariffs took effect on August 7, with rates on Thai imports set at 19%. However, BoT expects momentum to slow in the second half, though a technical recession is unlikely. Incoming governor Vitai Ratanakorn, known for his dovish stance, is set to take office in October, potentially paving the way for more cuts. The baht slipped 0.1% following the decision, while stocks extended gains. Inflation remained subdued at -0.7% YoY in July, well below the central bank’s 1%–3% target range, giving policymakers room to act amid lingering political uncertainty.