Asian stocks sagged on Thursday, tracking declines on Wall Street, after the U.S. Federal Reserve projected higher interest rates for a longer period.

U.S. Treasury yields remained depressed and the curve deeply inverted as traders continued to fret that tighter policy will trigger a recession. The U.S. dollar languished near a six-month low against major peers.

Crude oil, though, continued to firm after bouncing off last week’s nearly one-year low, with OPEC and the IEA forecasting a recovery in demand next year as China’s economy reopens.

Japan’s Nikkei (.N225) eased 0.17%, while South Korea’s Kospi (.KS11) dropped 0.92% and Australia’s stock benchmark (.AXJO) fell 0.4%.

Hong Kong’s Hang Seng (.HSI) tumbled 1.71% and mainland Chinese blue chips (.CSI300) declined 0.51%.

MSCI’s broadest index of Asia-Pacific shares (.MIAP00000PUS) slumped 0.91%, after climbing as high as 160.37 in the previous session for the first time since late August.

Overnight, the U.S. S&P 500 (.SPX) lost 0.61%, although e-Mini futures pointed to a slight 0.06% bounce for Thursday’s reopen.

Fed Chair Jerome Powell said on Wednesday that the central bank will deliver more rate hikes next year even as the economy slips towards a possible recession, arguing that a higher cost would be paid if the U.S. central bank does not get a firmer grip on inflation.

The comments followed the Fed’s decision to raise the benchmark rate by an as-expected half a percentage point – down from recent 75 basis point increases – but projected a terminal rate above 5%, a level not seen since a steep economic downturn in 2007.

“This is a very hawkish signal from the Fed: a substantially higher terminal rate than back in September that also has a real upside risk attached to it,” TD Securities analysts wrote in a client note.

“The Fed essentially acknowledged at this meeting that inflation is likely to remain stickier than initially expected, necessitating a more restrictive policy stance, which will end up pushing the U.S. economy in a recession in 2023,” they added.

“The weakening in risk assets and the flattening of the curve suggest that recession fears may be the dominant driver of market price action.”

The 10-year Treasury yield slipped back below 3.5% in Tokyo trading, with the two-year yield also edging lower to under 4.24%.

The spread between them also widened slightly to negative 74.3 basis points. An inverted yield curve has been a reliable indicator of recessions in the past.

The dollar index – which measures the greenback against six top peers, including the euro and sterling – held close to the overnight low of 103.44, a level not seen since June 16. It last stood 0.09% stronger at 103.75.

The euro eased 0.15% to $1.0664, but still near Wednesday’s more-than-six-month peak at $1.0695.

Sterling edged 0.19% lower to $1.2405, remaining not far from an overnight top at $1.2446, also the strongest in just over six months.

Investors’ eyes will now be trained on policy decisions from the European Central Bank and Bank of England later in the global day, as officials there also stood ready to hike rates again against the rising risks of fomenting recessions.

Crude oil traders took a more optimistic view on the global economy though, cheered by projections from OPEC and the International Energy Agency.

OPEC said it expects oil demand to grow by 2.25 million barrels per day (bpd) over next year to 101.8 million bpd.

The IEA raised its 2023 oil demand growth estimate to 1.7 million bpd for a total of 101.6 million bpd.

Brent crude futures rose by 1 cent $82.71 after closing Wednesday’s session up $2.02, while U.S. West Texas Intermediate (WTI) crude futures fell by 4 cents to $77.24 per barrel, following a $1.94 rise the previous session.

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Jabin Botsford/The Washington Post via Getty Images

• Sam Bankman-Fried is being held at a prison in Nassau that is known for its harsh conditions.
• His relatives called the prison to see if he could receive vegan food, a source told Bloomberg.
• Bankman-Fried’s lawyer previously cited his vegan diet as a reason he should be released on bail.

Sam Bankman-Fried is being held at a prison in the Bahamas that is notorious for harsh conditions, but according to Bloomberg, his family is still hoping his dietary preferences can be met.

The founder of the cryptocurrency exchange FTX is set to remain at the Fox Hill correctional center in Nassau until February after a judge on Tuesday denied him bail and ordered that he remain in custody while awaiting extradition to the US. Bankman-Fried was arrested by authorities in the Bahamas after US officials charged him with multiple counts, including fraud and money laundering.

Sources told Bloomberg Bankman-Fried has his own room in a maximum security area of Fox Hill, and that he’s unable to have visitors due to COVID-19 protocol. One source told the outlet relatives of Bankman-Fried called the prison on Tuesday to ask if he could receive vegan meals.

Reports on Fox Hill have described the prison as overcrowded and understaffed. Inmates at the prison have said they had to remove human waste with buckets and lived among infestations of rats and maggots, according to a 2021 human rights report compiled by the State Department. Inmates have also said they had long waits in between receiving meals.

Lawyers for Bankman-Fried tried to use his vegan diet as a reason he should be released while awaiting extradition, CoinDesk reported Tuesday. They asked the court to consider releasing him on a $250,000 bail so he could maintain his vegan diet and stick to his medications, including Adderall and Zyrtec.

It was unclear which of Bankman-Fried’s relatives may have called the prison about supplying him with vegan food, but the former CEO’s parents, who are Stanford law professors, were in attendance at his hearing in the Bahamas on Tuesday. According to CoinDesk, his mother laughed during the hearing when he was called a “fugitive.”

His other notable family members include his brother, Gabriel Bankman-Fried and his aunt, Linda Fried, who is the dean of the public-health school at Columbia University.

WASHINGTON (AP) — The Democratic-led House passed a short-term spending bill Wednesday to keep government agencies funded at current levels through Dec. 23, giving lawmakers more time to craft a roughly $1.7 trillion appropriations package that would cover the full fiscal year.

Congress faces a deadline of midnight Friday to pass the extension or allow for a partial government shutdown. The bill would give Congress an additional week to reach a compromise and now goes to the Senate for a vote before it is sent to President Joe Biden to be signed into law.

The one-week extension passed by a vote of 224-201, mainly along party lines.

House Republicans overwhelmingly opposed the extension. Many complained it would allow Congress to pass a massive spending bill before a Republican majority would take charge of the House in January and impose its will on spending.

Rep. Kevin McCarthy, the Republican leader in the House, said Republicans earned the opportunity after the midterm elections to shape the spending legislation early next year. He called for an extension that would last into the first quarter of 2023.

“Allow the American people what they said a month ago — to change Washington as we know it today,” McCarthy said.

While Republicans will take the majority in the House, Democrats gained one seat in the Senate and will hold a 51-49 majority there in the next session.

McCarthy noted that the two senators leading the efforts to craft the spending bill won’t be in Congress next year and thus won’t be accountable to voters for their work. Sens. Patrick Leahy, D-Vt., and Richard Shelby, R-Ala., are both retiring. Leahy is the chairman of the Senate Appropriations Committee and Shelby is the lead Republican on the panel.

“It’s still not even available for anyone to read and yet they want the ability to bring that up on the eve of Christmas.” Rep. Steve Scalise, the No. 2-ranking House Republican, said of the $1.7 trillion package. “It’s a sign that Congress failed to do its job.”

However, many Senate Republicans are aware that delaying negotiations into January sets up the kind of collision course that could lead to shutdown, and they fear the GOP would end up taking the blame.

Sen. Mitch McConnell, the top Republican in the Senate, has made the case that passing a full-year spending bill this Congress is better than the alternatives because it ensures a sizable increase in spending for defense.

“If a truly bipartisan full-year bill without poison pills is ready for final Senate passage by late next week, I’ll support it for our Armed Forces,” McConnell said Wednesday. “Otherwise, we’ll be passing a short-term continuing resolution into the new year.”

Shelby has said the two parties were about $25 billion apart on overall spending, though they are in agreement on spending about $858 billion on defense. Lawmakers announced Tuesday night that they had reached agreement on a “framework” that should allow negotiations to be completed by next week, but they provided no details.

Rep. Rosa DeLauro, the Democratic chair of the House Appropriations Committee, urged colleagues to vote for the extension. She said the final spending bill being negotiated “will help keep our nation and our communities safe with the certainty that we all deserve.”

The final bill is also expected to include the Biden administration’s request for an additional $37 billion in aid to Ukraine as well as other bipartisan priorities, including an election measure designed to prevent another Jan. 6 insurrection. The bill would make it more difficult for lawmakers to object to a particular state’s electoral votes and make clear that the constitutional role of the vice president in the proceedings is solely ministerial.

© Copyright 2022 Associated Press. All rights reserved.

Inflation has been a Republican buzz word for much of 2022 despite that party not having an official position on how to bring it down and not really even any command of how it happens. The U.S. has largely had a mild case of it compared to the rest of the world – and that’s due in part to two major bills that worked to reduce it – ones that the GOP largely voted against only to try claiming credit later.

Anyone paying attention would realize that inflation is a largely global phenomenon and it’s going down in America – dropping to 7.1% even while rising in other countries by double digits – such as the United Kingdom, or holding steady in Japan at 9%.

While President Biden acknowledged that the U.S. still has a ways to go on inflation – and it may not be entirely under control until next year, it’s become more apparent now than ever that we’re making a strong recovery – due in large part to the efforts of his administration.

It’s happening well before the Republican House majority can take office and we’re also likely to see a number of manufacturing jobs return to America between now and 2024 that will only further improve the country’s economic outlook.

The post Score one for Joe Biden appeared first on Palmer Report.

A former Twitter Inc manager convicted of spying for Saudi Arabia by sharing user data several years ago and potentially exposing users to persecution was sentenced to 3-1/2 years in prison on Wednesday, U.S. prosecutors said.

Ahmad Abouammo had been found guilty by a jury in August following a trial in federal court in San Francisco.

Prosecutors had sought a prison term of just over seven years, saying they wanted a “sentence strong enough to deter others in the technology and social media industry from selling out the data of vulnerable users.” Abouammo faced a maximum penalty of decades in prison.

Abouammo’s attorneys had asked U.S. District Judge Edward Chen for a probationary sentence at his home in Seattle with no prison time. They cited Abouammo’s ongoing health problems, lack of other convictions and family issues that had affected him during his time at Twitter, which spanned 2013 to 2015.

The case focused on Abouammo’s efforts to look up information on two Twitter users, a $42,000 watch he received from a Saudi official and a pair of $100,000 wire transfers.

Prosecutors said Abouammo, who oversaw Twitter’s relationships with journalists and celebrities in the Middle East and North Africa, conveyed sensitive information from the company’s systems to help Saudi officials identify and locate Twitter users of interest, potentially exposing them to persecution.

Federal public defenders representing Abouammo did not immediately respond to requests for comment. Twitter, recently acquired by Elon Musk, and the Saudi Embassy in Washington also did not immediately respond to requests for comment.

In their sentencing ask, attorneys for Abouammo said that while at Twitter, his family had been “struggling to pay for and deal with serious upheavals in his sister’s life,” including specialized medical care for her newborn daughter.

The attorneys also said Abouammo’s actions paled in comparison to those of Ali Alzabarah, another ex-Twitter employee, who was accused of accessing thousands of Twitter accounts on behalf of Saudi Arabia. Alzabarah left the United States before being charged.

Ukraine’s military said Russia had pulled some troops from towns on the opposite bank of the Dnipro River from Kherson city, the first official Ukrainian report of a Russian withdrawal on what is now the main front line in the south..

* Spain has stepped up security at public and diplomatic buildings after a spate of letter bombs, including one sent to Prime Minister Pedro Sanchez and another to the Ukrainian embassy in Madrid, where an official suffered minor injuries.

* Air raid alerts were issued across all of Ukraine following warnings by Ukrainian officials that Russia was preparing a new wave of missile and drone strikes. “An overall air raid alert is in place in Ukraine. Go to shelters,” country’s border service wrote on Telegram messaging app.

* Ukraine’s military said it had found fragments of Russian-fired nuclear-capable missiles with dud warheads in west Ukraine, and that their apparent purpose was to distract air defences.

* The recently liberated Ukrainian city of Kherson has lost its power supply after heavy shelling by Russian forces, the regional governor said.

* European Union governments tentatively agreed on a $60 a barrel price cap on Russian seaborne oil, with an adjustment mechanism to keep the cap at 5% below the market price, an EU diplomat said.

* Russian Foreign Minister Sergei Lavrov said on that big problems had accumulated in the Organization for Security and Cooperation in Europe (OSCE), accusing the West of spurning the chance to make it a real bridge with Russia after the Cold War.

* Lavrov said that discussions with Washington about potential prisoner exchanges were being conducted by the two countries’ intelligence services, and that he hoped they would be successful.

* The European Union needs patience as it sanctions Russia for its invasion of Ukraine, as most measures will only have an impact in the medium and long term, Lithuania’s prime minister said in an interview at  the  Reuters NEXT conference.

* Switzerland has frozen financial assets worth 7.5 billion Swiss francs ($7.94 billion) as of Nov. 25 under sanctions against Russians to punish Moscow for its invasion of Ukraine, the State Secretariat for Economic Affairs (SECO) said.

* Russia said the German parliament’s move to recognise the 1932-33 famine in Ukraine as a Soviet-imposed genocide was an anti-Russian provocation and an attempt by Germany to whitewash its Nazi past.

* Ukraine sacked a top engineer at the Russian-occupied Zaporizhzhia nuclear power plant, accusing him of collaborating with Russian forces, and urged other Ukrainian staff at the plant to remain loyal to Kyiv.

* Russia must withdraw its heavy weapons and military personnel from the Zaporizhzhia plant if the U.N. atomic watchdog’s efforts to create a protection zone are to succeed, Ukrainian Foreign Minister Dmytro Kuleba said.

* In a grim sign of the energy crisis caused by Russian attacks on Ukraine’s electricity grid, nine people have been killed in fires over the past 24 hours as Ukrainians resorted to emergency generators, candles and gas cylinders in violation of safety rules to try to heat their homes after power outages.

* “Remember one thing – the Russians are afraid. And they are very cold and no one will help them, because they do not have popular support,” – Andriy Yermak, chief of Ukrainian presidential staff.

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One week after Canada’s Keystone pipeline spilled more than 14,000 barrels of oil in rural Kansas in the United States, the cause is still unknown, according to regulators.

The 622,000 barrel-per-day pipe has been shut since last Wednesday, when a leak was discovered. Oil sprayed nearby pastures and leaked into Mill Creek before being shut by operator TC Energy.

More than 300 people are involved in the cleanup. The timeline for the full restart of the pipeline remained uncertain, and neither a root cause failure analysis nor a restart plan had been submitted, the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) said.

Keystone is a crucial artery shipping Canadian crude to U.S. refineries. Traders have been awaiting news of when it might restart operations. The spill is the largest in nearly a decade and the clean-up operation is expected to take weeks.

The spill occurred in Washington County, Kansas, about 20 miles (32 km) south of a junction in Steele City, Nebraska, where Keystone splits into two. Market players have speculated TC may first restart the leg of the pipeline that delivers to Patoka, Illinois, which did not leak.

“We don’t have a confirmation of a timeline and anticipate an update on restart today,” TC said in an email.

TC has not notified Washington County of any restart plans, said Randy Hubbard, the county’s emergency management coordinator, at 5 p.m. Central time. “I would assume that once they make that decision, they would reach out to us.”

Canadian crude prices have been relatively steady since Keystone shut down because of ample spare capacity in Alberta storage hubs, but the discount on Western Canada Select (WCS), the benchmark heavy grade, has started to creep wider as the outage drags on.

WCS for January delivery in Hardisty, Alberta, settled around $29 a barrel below U.S. crude on Tuesday, from a discount of around $27 a barrel before the leak. WCS for December delivery traded at $31.40 a barrel below U.S. crude on Wednesday, according to a Calgary broker.

WCS traded at Gulf Coast also firmed to a discount of $10.50 to U.S. crude, from minus $13 on Tuesday.

In the short term, more Canadian oil will go into storage, as alternative transportation options are limited, said Matt Murphy, director of energy research at TPH & Co.

Moving crude by rail requires a long lead time and the Enbridge Inc (ENB.TO) Mainline system is running at nearly full capacity this month, Murphy added.

The Mainline moves 3.1 million bpd of Canadian crude to refineries in the U.S. Midwest and eastern Canada. Enbridge will ration December deliveries by the most since last winter, according to company data.

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The two would-be rulers faced each other in the royal courtyard. Both were spoiled. Both were arrogant. And both of them were ruthless in their absolute unquenchable desire to lead.

As they faced each other and crowds gathered waiting expectantly, the two would-be rulers began to talk, crying out for loyalty from their subjects. One was out of power and wanted back in desperately. But he was losing steam. And he knew it.

The second was being talked about. A new poll had come out showing he was ahead of his nemesis by 23 points in the people’s approval. But the two men knew there was room for only one of them. And then a third man approached. The eyes of the crowd were breathlessly pulled away from the two to fasten hungrily on this new shiny object that had just made itself known.

What was described above is the metaphorical scene of what is happening – and what will continue to happen — to the leadership of the not-so-grand old party. Donald Trump and Ron DeSantis both want to rule. They want that very, very badly. And both of them are doomed to failure.

That poll is real. It was released by USA Today-Suffolk University and shows republicans favor DeSantis over Trump by 23 points. I imagine the orange creature is not going to have a peaceful night’s sleep tonight when he hears about THIS.

And yet DeSantis cannot and will not be the nominee. He can’t be. Because he’s nothing more than a “shiny new object.” Do you know how impossible it is to sustain this type of popularity for years? Do you know how fickle the Republicans can be?

It happens all over the world — not just in America. Shiny new objects come and go. They peak then they fall then someone new comes in. Let’s take a look at some of the former “shiny new objects” whom pundits declared had a real chance at winning the presidency:

Rick Santorum

Rudy Giuliani

Ben Carson

Scott Walker

Marco Rubio

Chris Christie

Many more. And we’ve had shiny objects on our side too. The third person I wrote about above is the REAL Republican nominee. This person is presently unknown, but a few things I can guarantee. This person will be ruthless. This person will be dishonest. This person will probably be an election denier.

This person is not a shiny new object. They have not yet emerged. But make no mistake. It is this person — Not Donald Trump and not Ron DeSantis — who will be our biggest threat come 2024.

The post More bad news for Donald Trump appeared first on Palmer Report.