3. ‘Unthinkable’
Treasury Secretary Janet Yellen is in Japan for meetings with fellow finance ministers from G-7 countries, but the debt ceiling remains front and center for her given that the United States’ credibility in global markets is at stake. Yellen again warned of economic catastrophe if Congress fails to address the debt limit. “The notion of defaulting on our debt is something that would so badly undermine the U.S. and global economy that I think it should be regarded by everyone as unthinkable,” she said. “America should never default.” Yellen said this in response to a question about leading GOP presidential contender Donald Trump urging Republicans to let the U.S. default if Democrats don’t agree to sweeping spending cuts in exchange for raising the debt limit.
4. Microsoft pauses pay hikes
Microsoft is putting pay raises on hold for salaried employees as the tech giant continues its cost-cutting efforts. The move comes after Microsoft said earlier this year it would cut nearly 5% of its workforce. Last year, the company beefed up its budget for merit pay increases and stock awards as inflation surged. “We will maintain our bonus and stock award budget again this year, however, we will not overfund to the extent we did last year, bringing it closer to our historical averages,” CEO Satya Nadella said in an email to employees. Performance bonuses for executives will also come down significantly, he said. Big tech companies in general are trimming costs and jobs after a year of share price declines that followed a period of rapid growth during the earlier days of the pandemic.
5. Showing cracks
The division between the pro-Russia mercenary Wagner Group and Russia’s defense ministry has grown more severe in recent days. Wagner’s leader has threatened to pull out of the protracted fight for Ukraine’s Bakhmut due to a lack of supplies. Russian forces, likewise, have pulled back somewhat in that fight, as Ukrainian fighters reclaim ground. All of this comes as Ukraine is expected to launch a new counteroffensive backed by western money and weaponry. Russia, meanwhile, is accelerating its efforts to recruit prisoners to fight. Follow live war updates.
— CNBC’s Mike Calia wrote this newsletter. Hakyung Kim, Sarah Whitten, Alex Sherman, Jihye Lee, Jordan Novet and Holly Ellyatt contributed.
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