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Coty is preparing to relaunch the designer’s cosmetics line, which closed abruptly in 2021 to the dismay of its small but devoted fan base.

Marc Jacobs Beauty is preparing a comeback, The Business of Beauty has learned, two years after its Velvet Noir mascara and other cult products were quietly pulled from shelves.

The return is part of an expanded partnership with Coty, the New York-based beauty giant that has produced the brand’s fragrances for two decades. That licence will now run at least through 2038 and include cosmetics for the first time. New products are likely to hit shelves in 2025, people familiar with the deal told The Business of Beauty.

The timing couldn’t be better for both parties.

In 2021, Marc Jacobs Beauty began discounting and offloading inventory as its agreement with LVMH-owned brand incubator Kendo came to a close. Fans were crushed — old product can still be found from unauthorised sellers on Amazon and Walmart’s marketplaces.

Rumours have swirled about a potential relaunch ever since, though evidence has been thin on the ground: in May, the Instagram account @trendmood1 kicked off fresh speculation when it uncovered an empty Marc Jacobs Beauty landing page on Net-a-Porter (it has since been removed). In a statement, Coty chief executive Sue Y. Nabi noted that consumers have been “campaigning” for the brand’s return.

But there was a grain of truth to that speculation. Marc Jacobs could still make a case to be on the cutting edge of pop culture when it disappeared. Products were gender neutral and a favourite of makeup artists; campaigns featured celebrities like Jessica Lange, well before casting older women was a gimmick, and fresh faces like Kate Moss’ daughter Lila.

Products of all sorts bearing Marc Jacobs’ name are also cool again. Heaven, a celebration of 1990s grunge and rave, is a phenomenon for Gen-Z. In August, the line launched its first beauty collaboration with Bleach London for hair dye. The Perfect Marc Jacobs fragrance, also launched in 2020, was the biggest prestige fragrance debut across the US, UK, Canada and Australia that year, according to Circana.

“The Marc Jacobs brand has been very intelligent with Perfect and Heaven; there’s community, nostalgia, grunge, a little Y2K,” said Marina Mansour, vice president of beauty and wellness at Kyra, a tech-powered creator platform. “The creative direction and use of celebrity is just fncking cool.”

Coty, meanwhile, is trying to reposition itself as a seller of prestige beauty, as its portfolio of mass-market brands like Max Factor and influencer lines like SKNN by Kim Kardashian look past their peak. The company owns the licences to Calvin Klein, Burberry and other big, luxury beauty brands. But such deals put Coty at the mercy of its partners: Kering, for one, created an in-house beauty division earlier this year, headed by a longtime executive at Coty rival Estée Lauder. The timeline for Marc Jacobs Beauty’s relaunch gives Coty ample time to develop a new blockbuster in the space before the first of its big licences comes up for renewal in 2028 (Coty hasn’t specified which brand deal expires that year, but market speculation is it’s Gucci).

Marc Jacobs Beauty, in other words, is a collaboration between a hot brand and a beauty conglomerate with the resources and the desire to go big.

When Marc Jacobs Beauty launched in 2013, it was ahead of its time. The original 122-piece collection featured vampy lip lacquers, precision tip felt eyeliners called “Magic Marc’ers” and purple nail polish meant for both men and women. Bold, campy and sophisticated all at once, the line was the antithesis of the natural makeup embodied by brands like Bobbi Brown Cosmetics.

The brand was also among the first major launches by Kendo, the beauty incubator that at the time was just transitioning from a Sephora subsidiary into an independent entity inside LVMH. Marc Jacobs was the first fashion line the luxury conglomerate entrusted to Kendo, with a goal of using beauty to bring more shoppers into Jacobs’ orbit.

Longtime Marc Jacobs collaborators David Sims and Katie Grand were tapped to photograph and style the backstage beauty-esque campaign, starring models like Edie Campbell. The ads appeared in nearly every September 2013 glossy. BoF reported at the time that the line was expected to generate more than $20 million in North American sales in its first year.

The line quickly found an audience, particularly for its Re(Marc)able foundation, though users were disappointed in its limited shade range.

“There was a fandom,” Mansour said.

Four years later, Fenty Beauty changed everything.

Rihanna’s beauty line, with its 40 shades of foundation, marked a sea change for how beauty brands were conceived and marketed, particularly in regard to non-white customers. It was also a game changer for Kendo and LVMH financially; sales reportedly topped $100 million in just 40 days. By 2021, Forbes estimated the brand was worth a “conservative” $2.8 billion.

Other Kendo brands were overshadowed by Fenty’s success, or were buried by the flood of new lines launched in the wake of its launch. Bite Beauty, known for its vegan ingredients, shuttered in 2022 after a “clean” rebrand two years prior. KVD Vegan Beauty has also fought for relevancy after its own revamp and its founder Katherine Von Drachenberg departing the brand in 2020.

Marc Jacobs Beauty had some major cultural moments even post-Rihanna.

At the 2019 Met Gala, Lady Gaga’s makeup look, complete with outsize, feathery gold and black eyelashes and white eyeliner, was courtesy of the makeup range and artist Sarah Tanno. But, like the designer himself, who in the late 2010s struggled with waning relevance and shelved plans for an initial public offering, there was a sense the line was never going to live up to its owners’ sky-high expectations.

Beauty proved one of the keys to Jacobs’ creative and commercial resurgence. A 2021 Instagram post where the designer admitted to a facelift and calling for transparency in plastic surgery saw nearly 54.000 likes and resulted in a Vogue profile.

And even when the fashion brand was at its lowest, Marc Jacobs’ fragrances have remained a lucrative business, especially with younger shoppers. The Daisy Marc Jacobs fragrance is ranked as the sixth best-selling fragrance in the US, according to Circana.

The Daisy and Perfect lines also exploded on TikTok during the pandemic. According to Kyra, #PerfectMarcJacobs saw 191.5 million engagements (likes, comments, shares and saves) between March and May. The Marc Jacobs Fragrances TikTok account has just 23,000 followers.

Marc Jacobs’ fashion business has also been transforming with a democratic eye on the future. CEO Eric Marechalle, appointed in 2017, introduced the Gen-Z breakout Heaven in 2020 and a mid-priced mainline while scaling back runway collections.

In a statement Monday, Marechalle positioned the relaunch of Marc Jacobs Beauty as rewarding “the loyal fans … who have been enthusiastic in their wishes for its return.”

Beauty trends are cyclical (Y2K makeup and hair has already come back around), but if Marc Jacobs Beauty can recapture its zeitgeist-making first impression with Gen-Z, its 2.0 era might be even more transformational than its first go-round.

The strategy the central bank adopts to fight the last mile of inflation has big, potentially painful implications for consumers, the markets and the economy

Much of the work lowering inflation is done: Amid the most aggressive series of interest rate increases in four decades, it has fallen to 3.2% from 9.1%.

This good news presents the Federal Reserve with a new thorny question. How aggressive should it be in squeezing out what’s left?

Their decision holds major implications for consumers, the markets and the economy—and whether Fed Chair Jerome Powell achieves a so-called soft landing that beats inflation without causing a recession.

Officially, the Fed’s target for inflation is 2%. With inflation running well above that number, officials are still focused on whether to raise rates one more time this year. But that is a relatively small consideration compared with the bigger question of how long to keep rates at that high level.

Fed officials could try to get to 2% quickly, such as by the end of next year, by raising rates higher and only slowly reducing them as the economy weakens. That would risk a sharper downturn and possibly kill the chances of achieving the soft landing.

On the other hand, if they’re satisfied that inflation is slowing durably, they could hold them at their current level and consider trimming rates later next year. That would take more time to get to the inflation target—around three years.

What if getting to 2% isn’t worth the pain? Another strain of thinking says the Fed should accept a rate around 3% as the new target. Powell and other Fed officials say moving the goal posts like that isn’t an option.

The challenge of finishing the fight against inflation will likely be a big topic of debate for central bankers when they gather for the Kansas City Fed’s annual retreat in the mountains of Jackson Hole, Wyo., where Powell is set to speak Friday.

Many economists still see a risk of recession over the next year under the weight of the Fed’s rapid rate increases, which have put stress on commercial real estate and regional banks. The central bank lifted its benchmark rate last month to a range between 5.25% and 5.5%, a 22-year high. That rate influences other borrowing costs throughout the economy, including for mortgages, car loans and credit cards.

Others worry that inflation’s recent decline will stall as consumer and business spending accelerates in coming months, forcing the Fed to raise rates again to trigger a downturn in inflation.

Quicker, or slower?

Among economists and politicians, debate is already raging over how the Fed should manage the coming phase. The move-quickly camp argues for the Fed to keep the screws tight to force inflation down to 2% briskly, even if that leads to recession. They say taking too long to bring prices back to the target could erode the Fed’s credibility, especially if the economy is hit with new shocks that drive up inflation.

If that happens, it would likely take an even more painful downturn later to ultimately bring inflation down, as occurred in the early 1980s. In their mind, taking our medicine now is a safer bet.

Another camp suggests the central bank could take a lesson from former Fed Chair Alan Greenspan and get to its 2% target more leisurely. Greenspan in the early 1990s charted an approach later dubbed “opportunistic.” Rather than push immediately for 2%, get there gradually over several years by holding rates at a level that could seem slightly higher than they need to be, and letting opportunities, such as the occasional economic slowdown, nudge inflation down bit by bit.

They say this approach would better balance the Fed’s mandate of low and stable inflation with maximum employment.

Several former Fed officials say the approach makes sense if inflation falls below 3% and then stalls. “If inflation gets down below 3%, your risk preferences may change for how much you’re willing to induce slower labor markets to get to 2% inflation,” said former Boston Fed President Eric Rosengren.

Richmond Fed President Tom Barkin said the 1990s aren’t a useful parallel because back then, the Fed was lowering inflation following a longer period when it was much higher. The Fed could go more slowly then because the public expected inflation to remain high. Now, in contrast, inflation expectations have been reset at a lower level. “Today, you’d worry about the risk of [high inflation] lingering and bringing expectations up,” he said.

Fed officials aren’t likely to be patient if inflation stabilizes above 3%. That would be a problem because without more obvious signs of an economic slowdown, pressure on wages could feed through to prices, said several former officials, including Rosengren, Richard Clarida, who served as Fed vice chair from 2018 until early 2022, and former Chicago Fed President Charles Evans.

“They’ve got to get the core inflation down below 3% before you start feeling really good about this,” said Evans. Underlying or “core” inflation, which strips out volatile food and energy prices, looks headed toward 3.5% by early next year.

Inflation continuing to run above 3% could require the Fed to keep raising rates. Once inflation falls below that level, the case for the Fed to consider rate cuts would heat up, Evans said.

“I’ve been in the two-point-something camp. It is important that it starts with a two,” said Clarida. “That sounds arbitrary, but some things in life are arbitrary.”

The raise-the-target camp says the central bank should simply declare 3% as its new target.

Some economists favor lifting the target because the cost of forcing inflation down to 2% over the next two years would likely be significantly higher unemployment.

Some had concluded years ago that, because of more frequent spells in which the Fed couldn’t cut interest rates once they were lowered to zero, the 2% inflation target was too low. With a higher target of 3%, interest rates would be higher in good times, giving the Fed more scope to counteract downturns by cutting them.

They think with inflation well off recent highs, the Fed could manage a transition to a 3% target without risking a persistently higher rate.

“The inflation target…is not meant to be an absolute rule,” said Adam Posen, a former Bank of England policy maker who now runs the Peterson Institute for International Economics. “We should be understandably reluctant about crushing the economy to get from 3.5% to 2.25% inflation.”

A higher target is also popular among Democrats concerned that rising unemployment or a recession would threaten President Biden’s re-election prospects.

The goal of 2% inflation “is not a science. It’s a political judgment they have to make,” said Rep. Ro Khanna (D., Calif.) “I don’t see why having a particular number as the Holy Grail…is the right way to get that judgment.”

Current and former Fed officials think changing the target now would be a big mistake.

Central banks have used explicit inflation targets to help convince the public that inflation would remain low and stable because the banks were signaling, in advance, how they would react in periods of higher inflation.

Powell made clear he won’t consider raising the target with inflation running above it, because it risks undercutting the entire strategy. “We’re not going to be considering that under any circumstances,” he said last fall. He repeated that view to a skeptical lawmaker in March. “This is not a time at which we can start talking about changing it,” Powell said.

“If you were to unilaterally declare that you’re not going to hit the target that you’ve set, then you are also declaring that you’re less credible in any target you set,” said Barkin.

The low inflation of the past two decades shows that 2% is a reasonable goal, Barkin said. “It was only 2½ years ago that we had 2% inflation, so…2% isn’t some chimera that no one could ever achieve,” he said. “It’s actually something that’s been very achievable for a very long time.”

Clarida said the relatively low yields of long-term government securities suggest investors believe Powell will achieve 2% inflation within a few years. Raising the target to 3% now “would almost certainly lead to a very substantial selloff,” said the former Fed vice chair, who oversaw a review of the Fed’s inflation-targeting framework in 2020.

Some Fed officials say they need to see clearer signs of slowing economic activity to be convinced inflation will keep falling. They could push to raise rates again this year.

A key consideration is “whether the economy really does accelerate in the second half of 2023,” which could pressure officials to raise rates above 6% next year, said James Bullard, who stepped down last month as president of the St. Louis Fed to become dean of the business school at Purdue University.

“What they are worried about right now is sustaining the disinflation we see, and getting the core inflation measures down on a 12-month basis, into the 3% range, and clearly falling further,” said Bullard.

Several, including Powell, have said they think rates are now restricting economic activity by slowing hiring, spending and investment. They see much more balanced risks of raising them too much versus too little.

That brings the Fed close to the last of three stages of tightening. In the first stage, in 2022, officials raised rates rapidly—in jumbo half-percentage-point and three-quarter-point increments. They moved to the second stage early this year, nudging borrowing costs up more slowly to find a level that restrains demand without causing unnecessary economic weakness.

In the third stage, the focus shifts to inflation-adjusted or “real” rates. That means that even if the Fed holds its benchmark rate steady, since inflation has declined, the effect would be as if the rate was raised.

As inflation falls, “if we don’t cut interest rates, at some point the real interest rate will continue to go up,” said New York Fed President John Williams in an interview earlier this year. He said he expects to lower rates next year not because of a sharp slowdown but simply to prevent real rates from becoming unnecessarily restrictive.

“You’d stop raising long before you got to 2% inflation, and you’d start cutting before you go to 2% inflation, too,” Powell said in July. “It’ll be about how confident we are that inflation is, in fact, coming down to our 2% goal.”

Powell suggested then that without a serious slowdown, the Fed wasn’t likely to entertain rate cuts until “a full year from now.”

The Fed under Greenspan didn’t have a publicly stated inflation goal. Congress charged the Fed with achieving “price stability,” but Greenspan never defined the term, which made it easier to cut rates to support a weak economy even if inflation was higher than desired. Under Greenspan’s successor, Ben Bernanke, the Fed adopted its official 2% inflation target in 2012.

Some officials bristle at comparing their potential approach of allowing inflation to move down more gradually to Greenspan’s because it implies that they would be OK with 3% inflation—and would just hope to get to 2% by getting lucky.

But their projections suggest they are thinking along similar lines: Their current policy won’t deliver 2% inflation immediately, but they will get there soon enough that they don’t need to cause a recession.

Most officials anticipate cutting interest rates by about 1 percentage point next year, even though they see core inflation falling to 2.6% by the end of the year—still above the target. Most see inflation reaching 2% by the end of 2025.

Those projections may be too rosy. Riccardo Trezzi, a former Fed economist who has re-created the central bank’s workhorse inflation-forecasting model—which assesses data alone and removes any judgment calls officials might make—estimates that the central bank’s model is likely to project core inflation at 2.7% in 2025.

Fed officials said discussions around such tactics are premature. “It feels pretty early to get to that particular hypothetical when core inflation is still at 4%, not 3%,” said Barkin.

In June, Barkin penciled in lower rates near the end of 2024 assuming the economy had contracted for two quarters. It’s hard to see how the Fed gets inflation back to its target without slower growth, he said. “If we do end up in this hypothetical situation, I would distinguish between patience versus hope,” he said. In other words, the Fed could entertain a more patient approach to bringing down inflation only after seeing evidence activity is weakening.

Others think the Fed is on track to bring down inflation over the next two years without significantly increasing unemployment. The path to a soft landing in recent months “seems to have gotten wider,” said Boston Fed President Susan Collins in a recent interview. The Fed’s current policy is deliberately and intentionally bringing inflation down, and to float a strategy that entertains a longer period of time to arrive at 2% “could be confusing and perhaps undermine the credibility” of the central bank’s policy, she said.

Arm projects future market growth as profit drops in recent quarter

Arm Ltd., the British company whose circuit designs lie inside billions of electronic devices, said profit fell by more than 50% in the most recent quarter in filings that kicked off what is expected to be the biggest initial public offering of the year.

Arm raised lofty expectations for its business overall but faces near-term market challenges. Sales of smartphones—a core market for Arm’s circuit designs—have slowed in recent quarters, including a 7.8% decline in the second quarter, according to International Data Corporation. The company reported $675 million of revenue in its latest quarter, ended in June, down from $692 million the year prior. It reported that net income more than halved to $105 million in the quarter.

Arm is one of the world’s most important semiconductor businesses, serving companies such as Apple, Qualcomm and Advanced Micro Devices AMD 2.63%increase; green up pointing triangle, which rely on it for some of their chips. Arm has served as a neutral party to the chip industry—offering its designs to everyone without favoring any one company.

The market Arm is targeting—chips that contain processors and go into smartphones, personal computers, televisions, servers, cars and networking equipment—should grow by nearly 7% a year to reach around $247 billion by the end of 2025, the company said in a filing with the Securities and Exchange Commission.

Arm’s revenue represents a small sliver of that total today, but the company said it expected the cost and complexity of chip design would increase, “resulting in our royalties comprising a greater proportion of each chip’s total value.”

The listing, set to take place next month on Nasdaq after meetings with investors, will test a nascent rebound in appetite for IPOs following many quiet months fueled by concern about inflation, stock prices and economic growth.

SoftBank confirmed in the filing that in August it acquired a 25% stake in Arm that was held by the Japanese technology investor’s Vision Fund unit for $16.1 billion. That deal, previously reported by The Wall Street Journal, implied a total valuation for Arm of around $64 billion. But SoftBank cautioned investors in the filing that the purchase price “may not be indicative of, and is not intended to reflect, expectations” of the value of Arm following the IPO.

Demand for PCs and smartphones that skyrocketed during the pandemic has tailed off in recent quarters, putting pressure on the chip industry. Nonetheless, executives and analysts expect a long-term surge in demand for data and computing power to lift chip sales to new heights in the coming decade.

SoftBank is planning to list a minority stake in Arm, roughly 10% of it, people familiar with the matter have said, with SoftBank retaining the rest. All of the proceeds from the IPO will go to SoftBank, Arm’s filing said.

Arm’s circuit designs and basic chip architecture, which the company sells to chip makers to incorporate into finished chips, have become ubiquitous in smartphones over the past two decades.

The company has extended its footprint into other, more powerful chips in recent years and is getting an added boost from recent excitement about artificial intelligence, which could bring new sales opportunities. More than 30 billion Arm-based chips were shipped in the company’s last fiscal year, up 70% from seven years ago, the company said in its SEC filing.

Chip maker Nvidia became one of a handful of companies valued at more than $1 trillion earlier this year on the strength of its chips’ use in creating powerful generative AI tools such as OpenAI’s ChatGPT. Nvidia, which tried to acquire Arm for $40 billion three years ago, is using Arm’s circuits in some of its most powerful coming AI chips.

Arm said in its SEC filing that chips based on its technology were already doing AI work on billions of devices including smartphones, cameras and cars. There will be a heightened focus in the future on doing that work faster and using lower power.

The Arm offering, because of its large size, will be closely watched by investors as further proof of whether the recent revival in the IPO market is sustainable. It will follow the successful but smaller issues in June by restaurant chain Cava Group and in July by Oddity Tech, a direct-to-consumer seller of makeup brands.

Other big IPOs expected before year’s end include grocery-delivery company Instacart and shoe maker Birkenstock.

Arm’s heavy exposure to the Chinese market risks drawing investor scrutiny to the IPO because of the mistrust between the U.S. and its rival superpower. The company said in its SEC filing that about 25% of its revenue came from China in its latest fiscal year, which made it “particularly susceptible to economic and political risks” affecting that country. Arm expects declining royalty revenue from China, it said, adding that such revenue already has been slowing because of economic issues and export controls imposed on the country.

China demonstrated its ability to intervene in the development of the U.S. chip industry last week, after Chinese regulators failed to approve Intel’s more-than-$5 billion offer to buy Israeli contract chip maker Tower Semiconductor. That inaction led the two companies to abandon their deal.

Arm also said its top five customers accounted for about 57% of revenue in its last fiscal year, which made it “particularly susceptible” to any industry slowdown, changes in trade protection and other government policies, or adverse developments that might hurt demand for the company’s designs.

The IPO will mark the second time Arm has gone public. The company listed shares in New York and London in 1998, as its circuitry gained a foothold in the burgeoning cellphone-chip market. It stayed publicly traded until SoftBank bought it in 2016.

Australian group slashes dividend after a year of lower commodity prices and inflationary pressures

BHP reported its lowest annual profit in three years as the world’s biggest miner by market capitalisation warned its prospects hinged on China’s efforts to revive its property sector and the severity of any steel production cuts by Beijing.

The Australian group, which has a heavy reliance on Chinese construction demand for steel made from its iron ore, said underlying profits for its year to the end of June were $13.4bn, down 37 per cent from the $21.3bn recorded a year earlier. BHP cut its dividend by almost half to $1.70, down from $3.25 the year before.

China, the world’s second-largest economy, is struggling to regain momentum as it grapples with a slowdown in the property sector, high youth unemployment and deflation. Its lacklustre growth is clouding the outlook for the big mining groups, which had posted record high earnings in recent years helped by soaring commodity prices. BHP said lower prices across major commodities and the effect of inflation, particularly on labour, diesel and electricity prices, were now putting pressure on profits.

“Commodity demand has remained relatively robust in China and India even as developed world economies have slowed substantially,” said chief executive Mike Henry, adding “in the near term, China’s trajectory is contingent on the effectiveness of recent policy measures”.

BHP said there were two key uncertainties for its outlook on iron ore, its biggest source of earnings.

“The first is how effectively China’s stimulus policy is implemented, especially with regards to real estate,” said BHP in its presentation. “The second revolves around the breadth, timing and severity of any mandated steel production cuts.” In the past, China has introduced steel production curbs with the goal of reducing oversupply.

Henry said on a media call that demand from China nonetheless remained “reasonably healthy”, as sectors including carmaking and green technology thrived. He said the effect of Chinese government stimulus activity in the property market would spur demand for iron ore in the latter part of 2023 and into 2024, if successful.

Analysts at Australian bank CBA have predicted the iron ore price will continue to decline from its latest March peak as a worsening outlook for Chinese property weighs on the commodity, and as stimulus measures take time to lift consumer confidence.

India remains a bright spot for global demand. Government plans to increase its steel output are a boon for demand for the Australian company’s coking coal, which fuels blast furnaces.

“We expect buoyant growth in India with strong construction activity underpinning an expansion in steelmaking capacity,” Henry said.

BHP is the latest mining company to reduce its dividend, though the payout was still the third largest dividend in its history.

Analysts at bank RBC said an increase in BHP’s capital expenditure forecast for the current year to $10bn was “much higher” than expected.

Henry said the rise from $7.1bn in 2022-23 reflected the company’s strategy to “invest in growth” through potash and copper — boosted by its takeover of Oz Minerals this year — in order to generate more cash.

Aug 21 (Reuters) - Waystar Inc, a private equity-owned vendor of software that helps hospitals and doctors' practices manage their finances, has tapped banks for an initial public offering that could value it at as much as $8 billion, including debt, according to people familiar with the matter.

Waystar's owners, buyout firm EQT AB (EQTAB.ST) and Canada Pension Plan Investment Board (CPPIB), have hired Goldman Sachs Group Inc (GS.N) and JPMorgan Chase & Co (JPM.N) to advise on the listing, the sources said.

The IPO could come later this year or early next year, subject to market conditions, the sources added, requesting anonymity because the matter is confidential. The valuation attained will also be subject to market conditions, the sources added.

EQT, CPPIB and Goldman Sachs declined to comment. Waystar and JPMorgan did not respond to a request for comment.

Waystar was formed in 2017 through the merger of Navicure and ZirMed. The company develops payment software helping clients such as large hospital systems with the collection of bills from patients.

Waystar was valued at $2.7 billion when EQT and CPPIB acquired a majority stake in the company in 2019 from Bain Capital, which stayed on as a minority investor. All three firms are represented on Waystar's board of directors.

Under EQT and CPPIB's ownership, Waystar has gained scale by acquiring some of its competitors, including eSolutions in 2020, which boosted its presence in the lucrative government health insurance market for the elderly, known as Medicare. The company now works with 1 million healthcare providers and handles more than 2.5 billion transactions annually, according to its website.

Fitch analysts, who track Waystar's outstanding debt, said the company stands to benefit from the expansion of the healthcare industry as the population ages and spending increases. The Centers for Medicare and Medicaid Services (CMS) expects national health expenditure to grow at an annual clip of 5.4% through 2031.

Investors prepare for Jay Powell’s speech on Friday at the Federal Reserve’s Jackson Hole conference

The sell-off in US government debt continued to hit the world’s largest bond market on Monday, with yields on benchmark Treasuries hitting new 16-year highs as investors come to grips with an economy that refuses to slow.

The yield on the 10-year note rose as much as 0.1 percentage points to 4.35 per cent, surpassing a previous high in October and sending it to the highest level since November 2007. The yield was still close to that level in late afternoon trading. Bond yields rise when prices fall.

Investors are increasingly looking towards a high-profile gathering of the world’s central bank chiefs in Wyoming later this week, where policymakers may signal interest rates must stay higher for an extended period to keep inflation moving lower.

Although multiple central bankers will attend the Jackson Hole conference, Federal Reserve chair Jay Powell’s speech on Friday will be closely scrutinised for additional hints on the pace and future direction of US monetary policy.

“We expect him to present a modestly hawkish medium-term baseline policy stance, allow for risk that the Fed is done hiking but not shut down the possibility of more tightening, while damping expectations of early cuts,” said Steve Englander, head of global G10 FX research at Standard Chartered.

The months-long sell-off in US Treasuries has been mirrored on the other side of the Atlantic, with yields on 10-year bonds in the UK and Germany recently hitting their highest levels since 2008 and 2011, respectively.

Minutes from the Fed’s July meeting, released last week, showed members of the central bank’s rate-setting committee saw “significant upside risks to inflation, which could require further tightening of monetary policy”.

A succession of robust economic data over the summer has raised doubts that the Fed will start cutting rates any time soon, and has been a primary reason behind the Treasury market sell-off.

“The US economy continues to defy widespread scepticism, with upside surprises coming at a steady clip and pushing yields higher,” said Karl Schamotta, chief market strategist at Corpay.

Elsewhere on Wall Street, the benchmark S&P 500 closed 0.7 per cent higher following a sharp sell-off last week. The tech-heavy Nasdaq Composite gained 1.5 per cent.

Shares in Nvidia, the high-flying chipmaker that is up more than 200 per cent year-to-date, rose 8.5 per cent ahead of its earnings report later this week.

“It has been an ugly run for financial markets and investors are back to worrying about a Fed outlook, which still leaves the door open for an even less investor-friendly path forward,” said Joel Kruger, market strategist at LMAX Group.

“Throw in plenty of worry around the outlook for China [ . . . ] and it all makes for a stomach-turning backdrop market participants are being forced to contend with,” he added.

The outlook for the Chinese economy was dealt another blow on Monday after the latest policy decision by the country’s central bank undershot market expectations.

The People’s Bank of China lowered its one-year loan prime rate, a reference for bank lending, by 10 basis points to 3.45 per cent but opted to keep the equivalent five-year rate steady at 4.2 per cent.

The move was the latest in a number of policy decisions that have fallen short of expectations, as economists polled by Bloomberg had unanimously projected 0.15 percentage cuts to the one-year and five-year rates.

China’s benchmark CSI 300 dropped 1.4 per cent, reaching its lowest level since November, while Hong Kong’s Hang Seng was down 1.8 per cent.

Investor calls for sweeping government support measures come at a time of heightened anxiety over China’s economy, which has struggled to regain momentum since the start of the year, when it reopened after a prolonged period of strict pandemic lockdowns.

Researchers from UBS investment bank have downgraded their forecasts for the country’s economic growth from 5.2 per cent to 4.8 per cent in 2023, citing a downturn in China’s dominant property sector, waning global demand, as well as underwhelming government stimulus measures.

“The government’s policy support has arguably been less than was indicated earlier in the year, and less than we expected”, said Tao Wang, chief China economist at UBS Investment Research.

Recent data releases have signalled that the world’s second-largest economy is slipping into deflation, while its exports have dropped and youth unemployment has soared, prompting the government to stop publishing the statistic altogether.

European equities made cautious gains on Monday, with the region-wide Stoxx 600 rising less than 0.1 per cent. France’s Cac 40 gained 0.5 per cent and Germany’s Dax advanced 0.2 per cent.

Energy stocks led gainers in Europe, after crude oil prices strengthened as Opec+ data signalled that global supply was beginning to tighten since Saudi Arabia and Russia lowered exports.

Oil prices slid later, with international benchmark Brent crude settling 0.4 per cent lower at $84.46 a barrel, while US West Texas Intermediate shed 0.7 per cent to $80.72 a barrel.