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

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Singapore’s Temasek is cutting pay for senior management and the investor team involved in FTX

Singapore state-owned investor Temasek cut the compensation of senior management and its investment team responsible for the recommendation to invest in failed cryptocurrency exchange FTX.

“Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions, took collective responsibility and had their compensation reduced,”[ads1]; chairman Lim Boon Heng said in a statement.

The move from Temasek comes after an internal review was launched to look into the investment in FTX, which resulted in a write-down of $275 million.

Lim added that there was misconduct by FTX “deliberately hidden from investors, including Temasek.” The statement did not specify how many employees were affected, nor the severity of the pay cuts.

– Lim Hui Jie

Fri May 26, 2023 11:38 AM EDT

The Fed’s Loretta Mester expects interest rates to rise

Cleveland Federal Reserve President Loretta Mester told CNBC on Friday that she expects more rate hikes will be necessary as inflation remains high.

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

Mester is a non-voting member this year on the rate-setting Federal Open Market Committee.

-Jeff Cox

Fri May 26, 2023 8:39 AM EDT

Preferred Fed inflation gauge rises more than expected

The core index of personal consumption expenditures, the Fed’s preferred inflation gauge, rose 0.4% in April. That’s more than economists polled by Dow Jones expected. Year over year, core PCE rose 4.7%, also more than expected.

— Fred Imbert

Fri May 26, 2023 9:19 AM EDT

The markets now expect an interest rate hike from the Fed 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 of a percentage point increased to 56%, according to data from the CME Group. It followed a report showing that prices for personal consumption rose 0.4% in April and 4.7% from a year ago.

The chance of an increase was only 17% a week ago. The probability of an increase by July at the latest rose to 75%.

-Jeff Cox

Fri May 26, 2023 11:13 AM EDT

Consumer sentiment slightly beats expectations

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

To be sure, that level is well below April’s 63.5.

“Consumer sentiment fell 7% on concerns about the economy, erasing nearly half of the gains made after the historic all-time low from last June. This decline mirrors the debt ceiling crisis of 2011, when sentiment also plunged,” Surveys of Consumers director Joanne Hsu wrote.

— Fred Imbert

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