Japanese stocks jump 2%, Asian markets rise after US reaches tentative debt ceiling deal

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Singapore’s Temasek cuts salaries for senior management and investment team involved in FTX

Singaporean public investor Temasek has cut compensation for senior management and its investment team responsible for recommending investment in failed cryptocurrency exchange FTX.

“While there was no fault on the part of the investment team in making its investment recommendation, the investment team and senior management, who are ultimately responsible for the investment decisions made, assumed collective responsibility and had their compensation reduced,” Chairman Lim Boon Heng said in a statement. .

Temasek’s move comes after the launch of an internal review to examine its investment in FTX, which resulted in a $275 million writedown.

Lim added that there was fraudulent conduct by FTX “intentionally hidden from investors, including Temasek.” The statement did not specify the number of employees affected, nor the severity of the pay cuts.

—Lim Hui Jie

Fri, May 26, 2023 11:38 AM EDT

Fed’s Loretta Mester expects interest rates to rise

On Friday, Cleveland Federal Reserve Chair Loretta Mester told CNBC she expects more interest rate hikes will be needed as inflation remains high.

“When I look at the data and look at what’s happening with the inflation numbers, I think we’re going to have to tighten up a bit more,” Mester said on “Squawk on the Street.” “We’ve made progress. Now it’s this calibration exercise, and that’s what’s hard.”

Mester is a nonvoting member this year of the Federal Open Market Committee responsible for setting rates.

—Jeff Cox

Fri, May 26, 2023 8:39 AM EDT

Fed’s favorite inflation gauge rises more than expected

The core personal consumption expenditure index, the Fed’s favorite inflation gauge, rose 0.4% in April. This is more than expected by economists polled by Dow Jones. Year-over-year, core PCE rose 4.7%, also more than expected.

—Fred Imbert

Fri, May 26, 2023 9:19 AM EDT

Markets now expect Fed rate hike in June

Markets raised their bets for a June rate hike from the Federal Reserve after warmer-than-expected inflation data on Friday morning.

The odds of a quarter-percentage-point increase jumped to 56%, according to data from the CME Group. This follows a report showing that prices for personal consumption expenditure rose 0.4% in April and 4.7% from a year ago.

The odds of a raise were just 17% a week ago. The probability of a hike no later than July has increased to 75%.

—Jeff Cox

Fri, May 26, 2023 11:13 a.m. EDT

Consumer sentiment slightly above expectations

The final May consumer sentiment reading was slightly above expectations. The University of Michigan consumer confidence index came in at 59.2, while economists polled by Dow Jones had forecast a reading of 57.7.

Admittedly, this level is well below April’s 63.5.

“Consumer sentiment fell 7% amid worries about the economy’s trajectory, wiping out nearly half of the gains made after last June’s all-time low. The drop mirrors the 2011 debt ceiling crisis. , during which sentiment also plunged,” Surveys director of Consumers Joanne Hsu wrote.

—Fred Imbert

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