Daily Update — May 15, 2025
Transitioning to a Low-Carbon Economy; China’s Datacenters; and Fed Balancing Tariffs
Today is Thursday, May 15, 2025, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.
Energy Transition & Sustainability
Listen: How HSBC is financing infrastructure for a low-carbon economy
The transition to a low-carbon economy will require significant investment in all types of energy infrastructure, including wind, solar and nuclear facilities, electricity grids, and electric vehicle charging stations. In this episode of the “All Things Sustainable” podcast, we hear from Danny Alexander, chief executive of HSBC’s infrastructure finance and sustainability unit.
Alexander was the keynote speaker at S&P Global Sustainable1’s recent annual summit in London. Podcast hosts Lindsey Hall and Esther Whieldon sat down with the executive on the sidelines of the event to hear how HSBC, one of the world’s largest banks, approaches financing for energy infrastructure.
Artificial Intelligence
China Data Centers: Top Players Will Dominate AI Push
The rapid expansion of internet datacenters in China is being driven by the belief that building the facilities will draw significant demand. According to S&P Global Ratings, major operators in the sector have sufficient demand to justify their capacity expansions. However, smaller and less competitive players may face risks of an asset bubble due to their inability to attract the same level of demand.
A significant factor contributing to this growth is the increasing emphasis on AI development within China's technology sector, which is expected to drive up the need for computing power. Budgets for internet datacenters are projected to rise among cloud service providers, social media platforms and internet service providers.
Learn more with S&P Global Market Intelligence’s Datacenter KnowledgeBase.
Economy
Fed faces tough balance as tariffs poised to push up inflation, unemployment
The economic implications of US President Donald Trump's fluctuating tariff policies are pushing the Federal Reserve into a difficult policy position. As the prospect of stagflation looms, Fed officials may soon face a dilemma: Combat the inflation anticipated from increased tariffs on goods from various trading partners or address the potential rise in unemployment as the domestic economy slows due to changes in global trade dynamics.
On May 7, the Fed kept interest rates unchanged, believing that this was the most prudent course given the uncertainty surrounding tariffs. With the scope and timing of tariffs still unclear, the next rate cut is not expected until fall and could be further postponed as the Fed awaits the effects on trade to show up in government data. Despite these challenges, the domestic job market remains relatively stable, with unemployment hovering just above 4% and inflation gradually progressing toward the central bank's 2% target.
In case you missed it
- China's megabanks will receive solid government support when needed, even as they increase bail-in capital buffers under regulatory guidelines. This enhanced capital cushion will likely give the banks more flexibility to support national priorities.
- In April, retail investors shifted to gradually buying US equities from heavy selling, likely reflecting a mixed reaction to the Trump administration's tariff announcements early in the month.
- The EU does not plan to buy Russian energy supplies — even if a peace deal for Ukraine is reached.
Upcoming events
- Quantext: Quantifying textual data with ProntoNLP’s proprietary LLM framework | May 20 (Webinar)
- Renewable Pathways: Empowering Datacenter Energy Procurement | May 21 (Webinar)
- Tariffs and Supply Chain Dynamics: Assessing Customer and Supplier Risk in a Global Market | May 22 (Webinar)