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Top economic headlines include: US debt ceiling impasse brings country closer to default; Banking crisis prompts G7 to focus on financial system resilience; Rising debt issues in North Africa.
Due to the debt ceiling impasse, the US is getting closer to defaulting
If Congress does not take action, political gridlock over raising the United States’ $31.4 trillion debt ceiling could force the nation into an unprecedented default as early as 1 June.
According to President Joe Biden, not raising the debt ceiling will cause the US economy to contract and result in the loss of thousands of jobs. Even further, Treasury Secretary Janet Yellen claims that a default would lead to a global economic slowdown and run the risk of damaging US economic dominance.
On May 9, Biden and prominent Republican lawmakers met to examine the issue. He is asking for an unconditional rise in the federal government’s borrowing cap. Kevin McCarthy, the speaker of the Republican-controlled House, has stated that his body will only ratify a compromise if Biden consents to retroactive spending cuts to address the escalating budget imbalance.
On May 9, Biden and prominent Republican lawmakers met to examine the issue. He is asking for an unconditional rise in the federal government’s borrowing cap. Kevin McCarthy, the speaker of the Republican-controlled House, has stated that his body will only ratify a compromise if Biden consents to retroactive spending cuts to address the escalating budget imbalance.