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☆ The US' AAA credit ratings at risk of a downgrade due to 'brinkmanship over the debt ceiling.' This could impact trillions of dollars worth of Treasury securities.
▼ + stars: | 2023-05-25 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Fitch expressed concerns about political partisanship amid negotiations over raising the debt ceiling. On Wednesday, major ratings agency Fitch put the US's credit on watch for a possible downgrade, citing political "brinksmanship" in negotiations over raising the debt ceiling. The ratings agency expects a resolution to the debt ceiling crisis before the X-date. However, the risk that the debt ceiling may not be raised has also gone up. Fitch also signaled concerns about challenges over governance amid the debt ceiling crisis.

WASHINGTON — House Speaker Kevin McCarthy said Wednesday that negotiations over raising the U.S. debt limit were progressing toward a deal despite disagreements over spending, with only eight days before the government could face an unprecedented default. Fitch Ratings, one of the big three ratings agencies, placed the United States' triple-A status on "rating watch negative." The warning came after McCarthy projected hope that negotiators would reach a deal in time to avoid default. The decision to let members fly home for the week is a tacit acknowledgment by House leadership that a deal to raise the debt ceiling does not appear to be imminent. Debt ceiling-related stress was affecting Treasury markets in particular, Yellen said at a Wall Street Journal event.

Persons: Kevin McCarthy, Fitch, McCarthy, Steve Scalise, Joe, Biden, Janet Yellen, Yellen Organizations: WASHINGTON, Fitch, Fox Business, White, Treasury, Republican, Democratic, Capitol Locations: United States, Washington, U.S

☆ US economy on the brink as time runs low to avert debt default
▼ + stars: | 2023-05-22 | by ( Stephen Collinson | ) edition.cnn.com time to read: +10 min

After a weekend of acrimony between negotiators for House Republicans and the White House, Biden will meet House Speaker Kevin McCarthy Monday for critical talks on pulling the economy back from the precipice. Biden and McCarthy to meet MondayThe rhetoric eased a little, however, after Biden and McCarthy spoke as the president flew home on Air Force One. McCarthy already passed a bill raising the debt ceiling in exchange for a wish list of Republican demands. This is a balance of power that ought to drive both sides towards a compromise, but extremist elements in the House GOP could make that impossible. Like McCarthy, Biden also faces political pressure within his own party after some progressive Democrats expressed fears he would offer the speaker too much in any deal.

☆ Biden and McCarthy had a 'productive' meeting but still can't agree on a debt ceiling solution with a default as soon as 10 days away
▼ + stars: | 2023-05-22 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Biden and McCarthy met on Monday to discuss the debt ceiling, and they still haven't reached an agreement. This comes as soon as ten days before the US could default on its debt. Despite pressure from some Democrats, Biden is still hesitant to bypass Congress to address the debt ceiling. This meeting came after negotiations were stalled on Friday because GOP negotiators were branding the White House's debt ceiling requests as "unreasonable," and it appeared that both sides were unwilling to budge on their debt ceiling demands. And emerging from the Monday meeting, McCarthy told reporters it was a "productive" meeting — but the two sides did not reach a deal.

☆ Goldman Sachs says the US has an extra 8 days before it runs out of money to pay its bills. That could buy it more time to negotiate the debt ceiling.
▼ + stars: | 2023-05-22 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

The US could default on its debt on June 8 or June 9, Goldman Sach's chief political economist told Bloomberg. The X-date is when the US can no longer pay its bills if the debt ceiling isn't raised. Treasury Secretary Janet Yellen has previously said the "X-date," or the date when the US can no longer pay its bills and risks a default, is June 1. But the actual deadline could be a week later than June 1, Alec Phillips, Goldman Sachs' chief political economist, told Bloomberg TV on Friday. While that may buy the US more time to negotiate a deal over raising the debt ceiling, it's still better to do it sooner or later, Phillips added.

☆ Premarket stocks: Debt ceiling woes could kill Wall Street dealmaking
▼ + stars: | 2023-05-22 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Before the Bell spoke with Mitch Berlin, EY Americas Vice Chair, Strategy and Transactions, to discuss the effect the debt ceiling drama is having on dealmaking:This interview has been slightly edited for clarity. Uncertainty around the debt ceiling is threatening to stall any momentum in the M&A market. If the debt ceiling is not raised within the next few weeks, dealmaking will largely be put on hold and [it] could set M&A dealmaking back to the lows of the early pandemic or worse. Janet Yellen stands by June 1 debt ceiling deadlineUS Treasury Secretary Janet Yellen on Sunday reaffirmed June 1 as the “hard deadline” for the United States to raise the debt ceiling or risk defaulting on its obligations. “There will be hard choices to make if the debt ceiling isn’t raised,” reiterated Yellen after Biden’s warning.

☆ 'We are not decoupling': G-7 leaders agree on approach to 'de-risk' from China
▼ + stars: | 2023-05-22 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

Chinese President Xi Jinping and hands with then U.S Vice President Joe Biden inside the Great Hall of the People on December 4, 2013 in Beijing, China. Leaders of the Group of Seven agreed there's a need to de-risk, not decouple from China, and acknowledged challenges posed by the mainland's practices which "distort the global economy." "We are not decoupling or turning inwards," the G-7 said in a joint statement released over the weekend as leaders met in Hiroshima, Japan. Leaders added, "We will seek to address the challenges posed by China's non-market policies and practices, which distort the global economy. Reiterating the stance, President Joe Biden said at a press conference on Sunday: "We're not looking to decouple from China, we're looking to de-risk and diversify our relationship with China.

☆ European markets head for cautious open as U.S. debt ceiling talks are set to resume
▼ + stars: | 2023-05-22 | by ( Holly Ellyatt | ) www.cnbc.com time to read: 1 min

European markets are heading for a mixed open Monday, with investors keeping an eye on tense debt ceiling talks in the United States. Federal leaders are expected to continue with negotiations on the U.S. debt ceiling on Monday as the country approaches a potential default, with President Joe Biden and House Speaker Kevin McCarthy scheduled to meet at the White House. On Sunday, U.S. Treasury Secretary Janet Yellen said "hard choices" will need to be made about which bills will go unpaid if the debt ceiling is not raised and reaffirmed her warning that the United States could default on its debt as early as June 1. Asia-Pacific markets mostly rose overnight as stocks in Tokyo extended a rally, while U.S. stock futures retreated slightly on Sunday evening.

☆ Veterans benefits, Social Security and Medicare payments, and SNAP could be among the first federal programs at risk if the US defaults in 10 days, a new analysis says
▼ + stars: | 2023-05-22 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

The US could default on its debt in as soon as ten days if Congress doesn't raise the debt ceiling. The Bipartisan Policy Center estimated which federal programs would be at risk in the days following a default. Social Security and Medicare payments, veterans benefits, and SNAP could be among the first to go. In the first ten days of June, the government could be unable to afford the following programs:Bipartisan Policy Center analysis of federal programs impacted by potential debt default. "If the debt ceiling isn't raised, there will be some hard choices to make about what bills go unpaid," Yellen said.

Section Four of 14th Amendment, adopted after the 1861-1865 Civil War, states that the "validity of the public debt of the United States ... shall not be questioned." WHERE DOES THE WHITE HOUSE STAND ON THE 14TH AMENDMENT? HOW WOULD MARKETS REACT IF BIDEN USES THE 14TH AMENDMENT? Administration officials and economists have said that a default triggered by a debt-ceiling breach would roil the world financial system and plunge the United States into recession. That immediate catastrophe might be avoided if Biden invoked the 14th Amendment.

WASHINGTON, May 21 (Reuters) - U.S. Treasury Secretary Janet Yellen on Sunday said June 1 remains a "hard deadline" for raising the federal debt limit, with the odds quite low that the government will collect enough revenue to bridge to June 15, when more tax receipts are due. Yellen, speaking on NBC's "Meet the Press" program, said there would be hard choices to make about payments to Americans if Congress failed to raise the $31.4 trillion debt ceiling before Treasury ran out of cash and was forced to default. So I think that that's a hard deadline," she said. U.S. President Joe Biden on Sunday called Republicans' latest offers in talks on lifting the government's debt ceiling "unacceptable," but said he would be willing to cut spending together with tax adjustments to reach a deal. Reporting by Andrea Shalal and Susan Heavey; Editing by Lisa ShumakerOur Standards: The Thomson Reuters Trust Principles.

CNN —Treasury Secretary Janet Yellen reaffirmed June 1 as the “hard deadline” for the US to raise the debt ceiling or risk defaulting on its obligations. So I think that that’s a hard deadline,” Yellen said during an interview on NBC’s “Meet the Press.”Yellen’s warning came hours after President Joe Biden delivered a grim assessment on the state of negotiations during his remaining hours in Japan. Reflecting that shift tone, the treasury secretary reiterated that there will be some bills that go unpaid, if the debt ceiling isn’t raised. “There will be hard choices to make if the debt ceiling isn’t raised,” she said. “My devout hope is that Congress will raise the debt ceiling,” she said.

☆ Biden says 'MAGA Republicans' are wiling to risk a debt default in order to hurt his reelection bid
▼ + stars: | 2023-05-21 | by ( John L. Dorman | ) www.businessinsider.com time to read: +4 min

President Biden said the GOP would have to move away from "extreme positions" over the debt limit. After the G7 summit on Sunday, Biden sought to set the tone for ending the impasse in Washington. "All four congressional leaders agree with me that default is not an option," the president said. "It is time for Republicans to accept that there is no bipartisan deal to be made solely on their partisan terms. "All four congressional leaders agree with me that default is not an option," Biden said during his conference.

☆ 'Hard choices' will need to be made about which bills go unpaid if the debt ceiling is not raised, Yellen says
▼ + stars: | 2023-05-21 | by ( Ashley Capoot | ) www.cnbc.com time to read: +2 min

Treasury Secretary Janet Yellen said Sunday that "hard choices" will need to be made about which bills will go unpaid if the debt ceiling is not raised. "We're focused on raising the debt ceiling, and there will be hard choices if that doesn't occur," she told NBC's "Meet the Press." "There can be no acceptable outcomes if the debt ceiling isn't raised, regardless of what decisions we make." Lifting the debt ceiling is necessary for the government to cover spending commitments already approved by Congress and the president in order to prevent default. Yellen also warned that a debt ceiling breach could affect essential government services.

With the end of another earnings season in sight, Wall Street's attention has turned to Washington and the debt ceiling deadline. Republican negotiators on Friday walked out of talks on raising the debt limit , abruptly ending a positive week of discussions that appeared to be leading toward a deal. Democrats and the White House have been pushing for a "clean" hike to the debt limit that would push the next deadline past the 2024 presidential election, while Republicans are pressing for spending cuts. Many investors believe this ongoing game of chicken over the debt limit is largely for show, since the U.S. has never defaulted on its debt obligations. U.S. President Joe Biden hosts debt limit talks with House Speaker Kevin McCarthy (R-CA) and other congressional leaders in the Oval Office at the White House in Washington, U.S., May 9, 2023.

☆ Janet Yellen told bank CEOs more mergers may be necessary, sources say
▼ + stars: | 2023-05-19 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

New York CNN —During Thursday’s meeting with the CEOs of large banks, Treasury Secretary Janet Yellen told executives that more bank mergers may be necessary as the industry continues to navigate through a crisis, two people familiar with the matter told CNN. However, sources tell CNN that bank mergers were discussed during Yellen’s meeting with bank CEOs. Yellen echoed remarks from US regulators who have said there may be bank mergers in the current environment, one person familiar with the matter said. Yet earlier this month, regulators allowed JPMorgan Chase, the nation’s largest bank, to buy most of First Republic, the second-largest bank to fail in US history. Michael Hsu, acting comptroller of the currency, told lawmakers earlier this week that his agency would be willing to quickly consider bank mergers.

☆ What the Markets Are Saying About the Risk of a Debt Default
▼ + stars: | 2023-05-19 | by ( Jeff Sommer | ) www.nytimes.com time to read: +2 min

First, the markets believe there is a real risk of a default in early June. Second, the possibility of a protracted failure of the United States to pay its bills is seen as extremely low. The markets will supply the United States government with all the money it needs, if only Congress grants the authorization to borrow it. Demand for Treasuries is robust and is likely to remain so, as long as the credit of the United States is unimpaired. But a U.S. debt default could change all of that, and another downgrading of U.S. debt, as was the case in 2011 when the United States came close to default, could increase U.S. borrowing costs.

☆ US regional bank stocks fall after Yellen says more bank mergers necessary
▼ + stars: | 2023-05-19 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, May 19 (Reuters) - Shares of U.S. regional lenders fell on Friday after CNN reported that U.S. Treasury Secretary Janet Yellen told bank chief executives that more mergers may be necessary following a series of bank failures. Yellen also reaffirmed the strength and soundness of the country's banking system at the meeting with bank CEOs on Thursday in the aftermath of the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank. The KBW Regional Banking Index (.KRX) fell 3%, with shares of PacWest Bancorp (PACW.O) and Western Alliance (WAL.N) among the biggest losers as they shed 4% each. The regional bank crisis has been partly blamed by some on aggressive interest rates by the U.S. Federal Reserve, which forced some lenders to seek new capital to make up for a fall in the value of assets linked to interest rates. The debt ceiling dispute has weighed on market sentiment, including for regional bank stocks.

☆ Yellen warns bank CEOs of ‘severe’ economic consequences if debt ceiling isn’t addressed
▼ + stars: | 2023-05-18 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

The meeting, which took place in Washington and included JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser, focused in part on the risks on the debt ceiling. Beyond the debt ceiling, Yellen and the Wall Street CEOs discussed the ongoing banking crisis. Yellen also met with mid-size bank CEOsIn addition to huddling with big bank CEOs, Yellen met in Washington on Thursday with executives from mid-size banks, a person familiar with the matter told CNN. Both the debt ceiling and the banking stress came up during Yellen’s meeting with the Mid-Size Bank Coalition of America, an industry trade group, the source said. During the meeting, which took place at the Treasury Department, mid-size bank CEOs expressed acute concern about how the debt ceiling standoff will impact their institutions, the source told CNN.

☆ Stock Market Today: Dow Rises 400 Points as Debt Ceiling Deal in Focus
▼ + stars: | 2023-05-17 | by ( ) www.wsj.com time to read: +2 min

Regional-bank shares are jumping after Western Alliance—a lender investors have worried about—gave a positive update on deposit growth. Its shares gained, along with those of PacWest, Comerica and Zions. On the housing front: Housing starts for April rose 2.2% on a monthly basis, beating expectations for a decline. The WSJ Dollar Index gained 0.3%, on pace to finish higher for the sixth session in the last eight trading days. Indexes in China fell, while Japan’s Nikkei 225 gained 0.8% to top 30000 for the first time since 2021.

☆ US stocks climb as optimism on debt-ceiling negotiations grows
▼ + stars: | 2023-05-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

US stocks moved higher Wednesday as policymakers shared more upbeat comments on the debt-ceiling impasse. House Speaker Kevin McCarthy said Tuesday that a deal could happen by the "end of the week." Treasury Secretary Janet Yellen has said the US government could default as soon as June 1. "I think at the end of the day we do not have a debt default," McCarthy told CNBC on Wednesday. Treasury Secretary Janet Yellen has warned repeatedly of the nearing so-called "X-date," when the government defaults on its debt.

U.S. Treasury Secretary Janet Yellen during a news conference at the Treasury Department in Washington on April 11. (Elizabeth Frantz/Reuters)It’s still likely that the US could default on its obligations early next month – possibly as soon as June 1 – if Congress doesn’t act, Treasury Secretary Janet Yellen reiterated Monday. President Joe Biden is expected to meet again on Tuesday with House Speaker Kevin McCarthy and other top congressional leaders. Still, the actual date could be a number of days or weeks later, depending on how much revenue the federal government collects and how much it has to pay out in coming weeks, Yellen said. Yellen once again urged Congress to act as soon as possible, noting that Treasury’s borrowing costs have increased substantially for securities maturing in early June.

☆ Yellen Says Treasury Still Expects U.S. Could Default as Soon as June 1
▼ + stars: | 2023-05-16 | by ( Andrew Duehren | ) www.wsj.com time to read: 1 min

As Democrats and Republicans debate raising the debt ceiling, they both agree that a default would be disastrous for the economy. WSJ explains why U.S. debt has become the center of the economy. Photo Illustration: Madeline MarshallWASHINGTON—Treasury Secretary Janet Yellen again said the U.S. could become unable to pay its bills on time as soon as June 1 if Congress doesn’t first raise the debt limit. The new forecast from Ms. Yellen doesn’t change the timeline for negotiators trying to find an agreement to raise the roughly $31.4 trillion debt ceiling. The Treasury chief had previously warned that the U.S. could default on its debt as soon as June 1.

☆ CNBC Daily Open: Investors are playing a waiting game
▼ + stars: | 2023-05-16 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. President Joe Biden, likewise, expressed optimism that a deal with Republicans to raise or suspend the debt ceiling could be reached. The S&P 500 added 0.3%, the Dow Jones Industrial Average gained 0.14% to snap a five-day losing streak and the Nasdaq Composite rose 0.66%. Biden will meet congressional leaders today to continue talks about the debt ceiling. Subscribe here to get this report sent directly to your inbox each morning before markets open.

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