Soft US jobs data sharpen debate over Fed’s next move

US employment data released for August has raised fresh questions about the pace and size of Federal Reserve rate cuts, with markets now weighing whether policymakers will opt for a 25 or 50 basis point move at their September meeting.

Non-farm payrolls rose by just 22,000 in August, well below consensus expectations of 75,000 and sharply down from July’s 79,000. To smooth monthly fluctuations, the three-month moving average has slowed to 38,000, compared with a peak of 232,000 in January. The unemployment rate edged up to 4.3%, within the narrow 4.0%-4.2% range seen since May 2024. Wage growth also eased to 3.7% year-on-year. Weakness was broad-based, with business services, manufacturing and construction all registering job losses. Leisure and hospitality remained a rare bright spot, though overall job creation continues to trend lower.

Despite the disappointing payrolls number, underlying demand in the economy remains relatively robust. Consumer spending has continued to expand, while corporate investment in artificial intelligence and data centre infrastructure is running at close to a 30% annualised growth rate. “US non-farm payrolls for August came in below expectations, and with job growth slowing, the Fed is likely to cut the US base interest rate when FOMC members next meet on 16-17 September,” says Daniel Casali, chief investment strategist at Evelyn Partners. He notes that there is “limited evidence that US tariff increases have had a significant impact on corporate profit margins,” which suggests unemployment is unlikely to rise sharply over the next year.

Labour cost dynamics also remain favourable. Compensation accounted for around 52% of GDP in Q1 2025, well below the 58% peak seen in 2001. Advances in telecommunications and digital platforms are enabling companies to tap into underutilised labour pools, easing wage pressures and improving matching efficiency across the economy. These structural factors suggest firms are still willing to hire, even as headline job creation slows. Analysts argue that this flexibility makes the US labour market better able to absorb shocks from tariffs, immigration restrictions and the federal hiring freeze currently in place through mid-October.

The weak payrolls data has reinforced expectations of a September rate cut, but opinion is divided over its size. Most investors remain aligned with a 25 basis point move, in line with the Fed’s traditional preference for gradualism. Yet the case for a larger 50 basis point cut is gaining traction, particularly given the uptick in unemployment and softer wage growth. “US employment data came in weaker than expected across most underlying metrics,” says Harun Thilak, head of global capital markets NA at Validus Risk Management. “While most investors remain aligned on a 25bp cut at the September Fed meeting, we expect market focus to shift toward calls for a larger move, with a 50bp cut now in play.”

Financial markets have already reacted, with US yields and the dollar moving lower. Some observers suggest this trend could continue if further soft data or tariff-related pressures emerge in the coming weeks. 

For treasurers, the debate highlights the need to remain agile. A 25 basis point cut would confirm the Fed’s bias towards easing while signalling caution on inflation risks. A 50 basis point move, by contrast, would underline concerns over growth and could trigger sharper moves in FX and rates markets. Either way, the combination of slowing job creation and still-elevated inflation points to a challenging backdrop. Corporate treasury teams will need to stress-test funding strategies, reassess hedging cover and remain alert to rapid shifts in dollar liquidity as the Fed calibrates its next steps.

 

American Airlines, Stanford and The World Bank get AFP Pinnacle Awards nod

American Airlines, Stanford University and The World Bank have been named finalists for the AFP 2025 Pinnacle Awards, which celebrate excellence in treasury and finance. Each project highlights a forward-looking approach to efficiency, visibility and impact in complex financial environments.

American Airlines worked with GTreasury to design a custom Collateral Management System that consolidates debt portfolio management, cash, FX and investments into a single platform. By centralising these functions, the airline boosted automation from 50% to 90%, lifting global cash visibility from 65% to 99%. The system has freed up 20% of treasury staff time for higher-value work, reduced risk through automation and delivered scalability across one of the world’s most complex operating models. Beyond immediate efficiencies, the initiative offers a replicable framework for asset-heavy industries seeking more resilient and agile treasury operations.

Stanford University’s UniRev platform modernises how more than 300 campus merchants handle transactions. The tool unifies services across departments, automates compliance and integrates seamlessly with the university’s systems and branding. The project has already generated US$1.3m in annual savings while restoring confidence in central finance operations. Its versatility in serving both small student groups and large departments has positioned UniRev as a centre of excellence. The solution is now being licensed to other universities and nonprofits, offering a scalable model for modernising payments in complex institutions.

The World Bank’s FundsChain platform harnesses blockchain to digitise and track funds disbursed to developing nations. By replacing manual, paper-heavy reporting with digital traceability, the system enhances accountability and ensures funds are used as intended. Its global impact is already evident. FundsChain has supported typhoon recovery efforts in Manila, delivered education and training to 95,000 youth in Kenya, and helped more than 750,000 households in Bangladesh. With expansion planned across more countries and projects, the platform is demonstrating how blockchain can increase transparency and reduce fraud in public financial management.

Together, these three initiatives reflect the evolving role of treasury and finance in shaping organisational resilience, operational efficiency and social outcomes. The Grand Prize winner will be announced during AFP 2025, with sponsor Truist donating US$10,000 to a charity of the winner’s choice.

“AFP is proud to recognise American Airlines, Stanford University and The World Bank for their leading innovations and practices,” said Pat Culkin, President & CEO of AFP. “As part of our mission to drive the future of treasury and finance, we remain committed to highlighting forward-looking solutions that will inspire the broader treasury and finance community in its pursuit of excellence.”

 

Banks boost tech spend as competition heats up

Technology spending is climbing steadily among the world’s largest corporate and investment banks (CIBs) as they race to meet client needs and counter growing competition from peers and non-bank liquidity providers. According to research from Crisil Coalition Greenwich, the top 12 global CIBs spent US$159bn in 2024 to run their businesses across origination and advisory, equities, fixed income, trade finance, cash management and securities services. That marked a 3.4% increase from 2023. Revenues rose more quickly, up 9% year-on-year to US$262.9bn.

“This spending growth is a continuation of a longer-term trend,” says Stephen Bruel, senior analyst on the Market Structure & Technology team at Crisil Coalition Greenwich and author of Corporate and investment bank spending in unpredictable times. “From 2019 to 2024, overall spending increased 17.2% globally, up 19.5% in the U.S. and up 12.9% in the EU.”

Technology has been the clear winner of this spending cycle. Investment has grown almost 29% since 2019, with US banks increasing allocations by 34% compared with 20% for their EMEA counterparts.

Roughly half of total spending still goes to the front office, primarily to cover compensation and benefits. But technology now stands as the second-largest expense line, reaching nearly US$35bn in 2024, behind only front-office pay at around US$60bn. “Senior decision-makers are focused on ensuring that spend in the back office enables front-office strategies,” says Bruel.

The rise in spending comes against a backdrop of market uncertainty. Even with a recovery in US equity markets and strong revenue growth from trading desks, banks continue to grapple with supply chain disruptions, geopolitical tensions and ongoing challenges in global trade.

That volatility is sharpening the focus on efficiency. “The volatility that hit the markets in early 2025 could increase what has already been a meaningful focus by banks on their spending,” says Bruel. “While banks understand all too well that spending is required to serve clients, achieve growth and create scale, they must also control costs to improve profitability and return on equity.”

The challenge for banks will be to sustain technology investment and operational resilience while keeping costs under control. With revenues outpacing spending for now, the sector appears to have some room to manoeuvre, but continued turbulence means pressure on margins is unlikely to ease soon.

 

Investors retreat from equities as MMFs surge

Record-high stock prices offered little comfort in August as investors pulled £1.31bn from equity funds, the latest Fund Flow Index from Calastone shows. The figure marks the heaviest outflows since the summer of 2022 and extends a three-month run of withdrawals, signalling growing caution despite buoyant markets.

Money market funds (MMFs) were the main beneficiaries of this shift. Investors added £633m during the month, the strongest inflows in two years, underscoring the appeal of short-term, low-risk vehicles at a time of elevated valuations and rising bond yields. The trend highlights how treasurers and other institutional investors are favouring liquidity and capital preservation while waiting for greater clarity on the market outlook.

Global equity funds were hardest hit, shedding £658m in August. This was the third straight month of outflows for a sector that had previously only ever seen isolated periods of selling. UK-focused funds also saw heavy redemptions of £657m, a rare instance where losses in the domestic market nearly matched those in global strategies. Outflows continued from Asia-Pacific funds, marking a 28th consecutive month of selling, while European funds bucked the wider trend with modest inflows.

Fixed income activity remained muted. After outflows of £122m in July, August saw net inflows of £133m. However, bond funds are still down £628m year-to-date, largely reflecting persistent weakness in the sovereign sector as investors grapple with higher yields and price declines.

For many, the retreat from equities is less about fundamentals and more about timing. Investors appear to be banking profits from this year’s rally, reallocating into safe-haven strategies while assessing the potential impact of ongoing geopolitical risks, tariff pressures, and the Federal Reserve’s next move.

Edward Glyn, head of global markets at Calastone, says the caution reflects unease over valuations and uncertainty about whether markets can sustain their current momentum. “Investors are top-slicing holdings to hang on to strong capital gains this year and park the proceeds in the money markets to wait out the storm they fear. Whether their caution is justified remains to be seen.”

 

US business owners hit record optimism despite inflation worries

Small and mid-sized business owners in the US are the most upbeat they have been in more than two decades, even as concerns over inflation and weaker profits weigh on expectations, according to PNC’s latest semi-annual survey. The poll found that 84% of owners are optimistic about their own prospects, a 23-year high and up from 78% in the spring. Confidence in the national economy also reached a record 58%, while 44% expressed optimism about the global outlook. Younger firms, in business for less than 10 years, were the most positive about international conditions.

PNC chief economist Gus Faucher said the findings reflected “good U.S. economic conditions heading into autumn with stock prices near record highs, continued job growth, and solid consumer demand.” He cautioned, however, that “risks to the economy are elevated, coming from tariffs and the uncertainty surrounding them, weaker job gains, and high interest rates.”

Inflation remains the leading concern, with 46% of respondents extremely worried about rising costs. Almost half of those surveyed (48%) expect profits to grow over the next six months, down from 57% a year ago, and 44% believe a recession in the next 12 months is likely. Among firms planning to raise prices, the average increase is 4.8%, higher than the 3.8% projected in the spring.

Labour market expectations have cooled, as just 13% of businesses plan to add full-time staff. This represents the lowest reading since autumn 2023 and well down from 21% in early 2024. Price pressures are being driven mainly by non-labour costs: 54% attribute higher charges to supplier expenses, compared with 35% six months ago.

The research also found that supply chains remain under pressure. Nearly half of owners are facing challenges and a similar proportion report higher supplier prices due to tariffs. More than half expect further increases in the next six months, averaging 4.4%. At the same time, 23% expect their cash reserves to be lower next year, up from 17% in 2024. The survey, conducted between 1 July and 5 August, covered 500 small and mid-sized businesses with annual revenues between $100,000 and $250m.

 

Bank of England completes RTGS renewal with Accenture

The Bank of England has completed the renewal of its Real-Time Gross Settlement (RTGS) service in partnership with Accenture, marking a major upgrade to one of the UK’s most critical pieces of financial infrastructure. RTGS underpins the wholesale payments system by settling interbank transactions instantly and securely. It supports around £800bn of payments daily across financial institutions. The renewed platform, which went live on 28 April, replaces the previous digital core with a cloud-based, automated architecture designed to improve speed, scalability and resilience.

Since launch, the system has processed more than 9.4 million transactions worth £35.2tn, with a record single-day total of 295,000 payments. The Bank said the new platform will widen access by enabling faster onboarding and providing APIs that allow participants to connect more easily, broadening the range of institutions able to join the system.

The update also introduces enhanced operational safeguards. Daily automated testing runs across more than 40,000 scenarios, while failover mechanisms have been embedded to allow critical processes to switch seamlessly to backup systems in the event of disruption. Additional monitoring tools provide real-time visibility of payment flows and system performance.

The RTGS renewal is intended to ensure the UK wholesale payments system remains robust as transaction volumes grow and as the market demands greater interoperability with other platforms. It also lays the groundwork for future innovation, including support for new types of financial market infrastructure and potential integration with digital currencies.

 

FIS launches AI-powered Neural Treasury suite

FIS has unveiled Neural Treasury, an AI-driven suite of tools designed to overhaul how corporate treasury teams manage cash, liquidity and risk in an increasingly complex operating environment. The platform combines artificial intelligence, machine learning and robotics to automate routine processes, provide deeper analytical insight and help treasurers shift focus from operations to strategy. FIS said the aim is to improve efficiency, reduce risk and unlock liquidity for growth.

At its core is Treasury GPT, an LLM developed for treasury applications and embedded within FIS’s platform. It is designed to help teams analyse data, configure system usage, set policy and benchmark against industry best practice. Other features include predictive cash flow modelling based on historical patterns, continuous monitoring of transactions for fraud detection, and automated reconciliation and liquidity aggregation.

The system also gives executives a consolidated view of receivables and payables, allowing for faster, more informed decisions around cash positioning, forecasting and payment execution. By using cloud-native architecture, FIS intends the suite to scale easily across industries and company sizes, from mid-market firms to multinationals.

For treasurers, the appeal lies in the potential to combine risk management with operational savings. Automating reconciliation and accounting tasks could release resources for more strategic activity, while predictive analytics may provide an earlier warning of liquidity pressures. Fraud detection powered by adaptive AI also promises greater resilience as payment threats evolve.

JP James, head of Treasury and Risk at FIS, said the new platform reflects a wider shift in the role of treasury. “Corporate treasury departments are the financial nerve centre of their organisations, but they're too often constrained by legacy systems that struggle to meet the needs and pace of today’s increasingly complex financial landscape. Neural Treasury is designed to harness the power of AI to help corporate treasurers act as strategic leaders.”

 

BBVA and SAP join forces on corporate banking integration

BBVA has entered a strategic alliance with SAP Spain to integrate SAP Multibank Connectivity into its corporate banking services, aiming to streamline financial transactions and attract new business clients. The agreement will be applied across all markets in BBVA’s global footprint, including Spain, Mexico, Türkiye, Argentina, Colombia, Peru, Uruguay, Venezuela, Portugal, the UK, France, Belgium, Italy, Hong Kong and the US. Clients in these regions will gain access to a fully integrated suite of solutions designed to improve the efficiency and agility of corporate and business banking operations.

The service will be offered via BBVA Pivot, the bank’s platform for corporate treasury management. By linking banking services such as payments, collections and working capital management directly with SAP’s enterprise resource planning systems, the integration enables companies to centralise financial transactions, automate core processes and reduce the time required for system connections.

One of the most significant advantages lies in payment automation and bank reconciliation. Automating these processes helps minimise errors and fraud risks associated with manual handling, while improving operational efficiency and the security of information exchange between companies and the bank. Businesses will also benefit from connectivity with international standards such as EBICS and Swift, ensuring secure global interoperability.

Centralising transactions within a single system is also expected to enhance regulatory compliance. By providing real-time visibility over payments and treasury positions, companies can make more informed decisions and manage liquidity more effectively.

 

Deutsche Bank arranges US$184m financing for Thai satellite

Deutsche Bank has closed a US$184m export credit facility for Space Tech Innovation (STI), a subsidiary of Thai satellite operator Thaicom, to fund the development of the THAICOM 10 project. The loan is guaranteed by French export credit agency Bpifrance Assurance Export.

Alongside Standard Chartered, Deutsche Bank will provide a 14-year facility to finance STI’s contract with Airbus Defence & Space to manufacture the new Software Defined High Throughput Satellite (SD-HTS). The satellite is scheduled for launch on a SpaceX Falcon 9 rocket from Florida in 2027.

THAICOM 10 is designed to expand connectivity across Thailand and neighbouring regions. It will provide broadband internet in underserved areas, enhance maritime links, support distance learning and telemedicine, and strengthen security networks.

The financing marks Deutsche Bank’s first export credit agency-backed deal in Thailand and reflects growing demand for long-term funding structures to support the region’s digital infrastructure. For Thaicom, the project is positioned as a key milestone in its strategy to broaden operational capabilities and deliver next-generation satellite services across Asia.

By securing ECA support, STI has been able to lock in competitive financing terms, underlining the importance of international collaboration in major space technology investments.

 

Yunex Traffic adopts Surecomp’s RIVO to digitise trade guarantees

Yunex Traffic has selected Surecomp’s RIVO platform to manage its global portfolio of bank guarantees, as the company moves to strengthen efficiency and resilience across its international trade finance operations. Operating in more than 40 countries, Yunex Traffic provides traffic management and road safety systems. With a complex global supply chain and growing exposure to tariff volatility, the company required a more streamlined and transparent approach to handling its guarantees. These include bid and performance guarantees, issued through multiple banks and jurisdictions, with a need for greater speed, accuracy and oversight.

By adopting a centralised, cloud-based platform, Yunex Traffic aims to reduce reliance on manual processes and email-based communication with banks. The RIVO system enables corporates to digitise the entire lifecycle of trade guarantees, offering real-time visibility, reduced operational risk and faster execution of transactions.

The shift reflects a broader trend among multinational firms to prioritise digital hubs for trade finance management. With increasing regulatory and geopolitical pressures, corporates are seeking tools that provide both greater transparency and flexibility while ensuring compliance across markets.

For Yunex Traffic, the move is part of a strategy to diversify suppliers and mitigate counterparty risks, while ensuring guarantees can be issued and tracked more efficiently. For banks, integration into platforms like RIVO offers an opportunity to enhance client service through more collaborative and secure processing.

 

Neo posts 50% jump as payments top €25bn

Neo has processed more than €25bn in payments through its corporate multi-currency accounts since launching in 2020, as demand rises for flexible FX solutions amid heightened currency volatility. More than €5bn of that total has been cleared since January 2025, with cross-border payment volumes up over 50% year on year. The figures reflect how treasurers are adapting to tariff-driven uncertainty and sharper exchange rate swings by adopting proactive hedging strategies and greater access to multi-currency liquidity.

While large corporates often secure preferential terms from traditional banks, small and medium-sized enterprises can face higher fees, slower settlement and limited support. Neo’s platform aims to bridge that gap by enabling clients to open international bank account numbers, make payments in over 25 currencies and manage FX costs more transparently. Average trading fees are positioned below those typically charged by banks, while wallet functionality allows firms to hold and exchange currencies for instant settlement.

The company now serves more than 400 corporates across 28 countries, connected to over 10,000 banks via Swift. Having reached profitability in 2024, it continues to expand as treasurers seek more efficient ways to manage cross-border transactions and protect liquidity in volatile markets.

 

Flexport partners with BlackRock on $250m inventory finance

Flexport has teamed up with funds and accounts managed by BlackRock to provide up to $250m in supply chain financing for its customers. The funding will be managed through Flexport Capital, the company’s financial services arm, and will expand access to working capital solutions directly integrated within its logistics platform.

The arrangement enables businesses to secure financing across a range of needs, from inventory and logistics to tariff-related costs, asset-based lines of credit and term loans. Customers can tap capital at different stages of the product lifecycle, from supplier pickup to final delivery, with fewer of the fees and documentation requirements typical of traditional lending models.

Since its launch in 2017, Flexport Capital has issued more than $2bn in financing, with an annualised growth rate of 71% over the past five years. The new partnership with BlackRock is expected to broaden both the scale and scope of financial services available to customers, helping them to manage cash flow gaps, accelerate growth and respond more effectively to market opportunities.

By embedding financing into its wider logistics ecosystem, Flexport aims to give customers a more seamless way of managing both physical and financial supply chains.