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☆ How tornadoes, crypto and mudslides pushed up the debt default deadline
▼ + stars: | 2023-05-19 | by ( Samantha Delouya | ) edition.cnn.com time to read: +3 min

While the Treasury Department hasn’t explicitly given a reason for its tax revenue deficiency, experts have said two main factors may have caused a shortfall. Pugliese said that last year, capital gains taxes paid to the government were “unusually strong” due to a market boom. That led to really strong capital gains tax revenue increases,” he said. Tornadoes, winter storms and mudslides pushed deadlines for millions of taxpayersAnother factor that may have lowered the federal government’s tax income this year: unexpected natural disasters. California’s payments might have had an outsized effect on the federal government’s tax revenue shortage, said Mark Zandi, chief economist at Moody’s Analytics.

☆ Watch CNBC's full interview with Moody's Analytics' Mark Zandi on state of U.S. economy
▼ + stars: | 2023-05-19 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Moody's Analytics' Mark Zandi on state of U.S. economyMark Zandi, Moody’s Analytics chief economist, joins 'Squawk on the Street' to discuss if Zandi has rethought his position on what the Federal Reserve should do, the mixed economic data the economy has recently shown and much more.

☆ Fed should be done with rate hikes as inflation begins to slow, says Moody's Mark Zandi
▼ + stars: | 2023-05-19 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed should be done with rate hikes as inflation begins to slow, says Moody's Mark ZandiMark Zandi, Moody’s Analytics chief economist, joins 'Squawk on the Street' to discuss if Zandi has rethought his position on what the Federal Reserve should do, the mixed economic data the economy has recently shown and much more.

☆ US Chamber of Commerce argues invoking 14th Amendment would be as ‘economically calamitous’ as a default
▼ + stars: | 2023-05-19 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

Bernie Sanders, Elizabeth Warren and other progressives to urge the White House to use the 14th Amendment to avoid a disastrous default. Bradley argued that invoking the 14th Amendment would send Treasury rates spiking, lifting the cost of borrowing for families and businesses. Experts have warned that invoking the 14th Amendment would likely spark a constitutional crisis and Treasury Secretary Janet Yellen recently cast doubt on the idea. US markets turned negative on Friday on news that debt ceiling negotiations between the White House and House Republicans have hit a snag. “If the rhetoric is dark next week, markets will start to react.

☆ Debt ceiling threat: Time to take this political football off the field
▼ + stars: | 2023-05-17 | by ( Christine Romans | ) edition.cnn.com time to read: +5 min

In theory, the debt ceiling should act as a fiscal restraint during the budgeting process. Deciding later not to pay the bills by not raising the debt ceiling is not sound fiscal policy. Federal Reserve Chairman Jerome Powell, a Republican, has said the debt ceiling is counterproductive. And the CEO of the nation’s biggest bank, JPMorgan Chase’s Jamie Dimon turns visibly frustrated at the subject of the debt ceiling. KPMG Chief Economist Diane Swonk says the politicization of the debt ceiling has weakened America.

☆ Commercial real-estate prices could tumble 10% from their peak and defaults are sure to increase, Moody's chief economist says
▼ + stars: | 2023-05-17 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Expect commercial real-estate prices to plunge 10% from their peak, along with a wave of defaults, Moody's chief economist said. "Lots more CRE price declines are coming, with prices expected to be off 10% peak-to-trough by mid-decade," Mark Zandi said. Stress has been building in the commercial property industry as investors fret it could be the domino to fall in the US economy. "Lots more CRE price declines are coming, with prices expected to be off 10% peak-to-trough by mid-decade," he said. "CRE loan delinquencies and defaults are sure to increase, causing agita for the banking system.

☆ There's 'still a lot to do' on a debt ceiling agreement with economic catastrophe as soon as 2 weeks away , Kevin McCarthy says — but 'it is possible to get a deal by the end of the week'
▼ + stars: | 2023-05-16 | by ( Ayelet Sheffey | Juliana Kaplan | ) www.businessinsider.com time to read: +5 min

Kevin McCarthy said they are still far apart on a deal, but he thinks an agreement could be reached this week. The US could default on its debt as soon as early June. "Lot of work to do in a short amount of time," McCarthy told reporters following the meeting. Schumer told reporters following the meeting that it was a "good and productive meeting. It's unclear where negotiations will go from here — McCarthy told reporters on Tuesday that he wants to continue discussions with the White House as soon as possible.

☆ The government's main budget experts confirmed that the US could risk economic catastrophe as soon as early June
▼ + stars: | 2023-05-12 | by ( Juliana Kaplan | Ayelet Sheffey | ) www.businessinsider.com time to read: +3 min

The nonpartisan Congressional Budget Office projected the US could run out of money in early June. That projection tracks with Treasury Secretary Janet Yellen's warnings on when the US could default. Congress can step in and prevent the crisis, but so far Republicans and Democrats are still sparring. So far, though, Congress seems to be running up the clock as Republicans and Democrats spar over how to avert a preventable catastrophe. The top lawmakers were expected to meet with Biden again on Friday to discuss the debt ceiling, but the meeting was reportedly postponed to give staffers more time to chat on potential areas of compromise.

☆ ‘Every family should be concerned’ about debt ceiling, consumer watchdog warns
▼ + stars: | 2023-05-12 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

Every family should be concerned,” Rohit Chopra, director of the Consumer Financial Protection Bureau, told CNN in an interview on Thursday. If Congress fails to address the debt ceiling, the federal government could run out of money as soon as June 1, according to Treasury Secretary Janet Yellen. “A lot of things we assume are part of our financial fabric would get ripped away,” Chopra told CNN. The debt ceiling is very likely to be a focus next week when Yellen is scheduled to meet with leading bank CEOs in Washington at a trade association meeting. Moody’s Analytics on Wednesday increased its probability of a breach of the debt ceiling to 10%, up from 5% previously.

☆ These states will be hit the hardest if the US debt ceiling standoff isn’t resolved
▼ + stars: | 2023-05-10 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

While most states would be “hit hard” by a debt limit breach, the economic pain would vary from state to state, according to projections released on Wednesday by Moody’s. Florida, Ohio and Pennsylvania would also likely lose hundreds of thousands of jobs apiece if there is a breach of the debt ceiling lasting several months, Moody’s found. In the event of a prolonged breach of the debt ceiling, Moody’s estimates some large states would each lose hundreds of thousands of jobs. ‘A real threat’In its report, Moody’s assigns a 10% probability to a breach of the debt ceiling, up from 5% previously. “What once seemed unimaginable now seems a real threat,” Moody’s Analytics chief economist Mark Zandi wrote in the report.

☆ Here’s the inflation breakdown for April 2023 — in one chart
▼ + stars: | 2023-05-10 | by ( Greg Iacurci | ) www.cnbc.com time to read: +3 min

Where consumers saw prices fall in AprilConsumers saw average prices decline outright in April in certain categories. Housing — the largest component of the average household's budget — was the largest contributor to inflation in April, the BLS said. watch now"It looks like inflation in the [shelter] category has peaked," Andrew Hunter, senior U.S. economist at Capital Economics, said. Overall, households are faring much better than they were months ago relative to inflation in staples like food, energy and housing, according to Zandi at Moody's Analytics. Why inflation surged to multi-decade highsConsumer prices began rising rapidly in early 2021 as the U.S. economy started to reopen after the pandemic-related shutdown.

☆ Debt ceiling standoff doesn't show clear path to agreement, says James Pethokoukis
▼ + stars: | 2023-05-09 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailDebt ceiling standoff doesn't show clear path to agreement, says James PethokoukisJames Pethokoukis, American Enterprise Institute economic policy analyst, and Mark Zandi, Moody’s chief economist, joins 'Squawk on the Street' to discuss any upcoming compromise in the debt ceiling debate, the economic impact of the debt limit stall and more.

The US could breach the debt ceiling and run out of money to pay its debts as soon as June 1. A White House official previously told Insider that Biden would stress that Congress "must take action to avoid default without conditions." Additionally, Wall Street's response to the debt-ceiling crisis is different this time around. Even so, he added, this debt-ceiling crisis "seems much more dangerous" than the ones from the Obama years. Biden has options to avoid a debt-ceiling crisis that don't involve CongressTuesday's meeting between Biden and congressional leadership aims to break through the logjam.

☆ Opinion: Vladimir Putin’s anxious time
▼ + stars: | 2023-05-07 | by ( Richard Galant | ) edition.cnn.com time to read: +15 min

We’re looking back at the strongest, smartest opinion takes of the week from CNN and other outlets. He imagines a boy sitting “upon the high and giddy mast” of a ship tossed by wind and waves. “Uneasy lies the head that wears a crown,” concludes the king in Shakespeare’s play. Russia said that President Vladimir Putin was the intended target of a foiled Ukrainian drone attack on the Kremlin, an allegation Ukraine denied. The unfortunate monarch who was the last to own the original St. Edward’s Crown, King Charles I, was convicted of treason and beheaded on January 30, 1649.

☆ Nearly half of Americans are concerned about the safety of their money in banks, survey finds
▼ + stars: | 2023-05-05 | by ( Beatrice Nolan | ) www.businessinsider.com time to read: +2 min

Nearly half of US adults are worried about the safety of their money in banks, per a Gallup survey. The survey found that 48% of adults were concerned about their money being in banks. Of those, 19% said they were "very" worried and 29% said they were "moderately" concerned about their funds. The majority of Republicans surveyed — 55% — said they were at minimum moderately worried about the safety of their funds. More than half of those without a college degree said they were very or moderately concerned but only 36% of those with a college degree said they were worried.

The United States could run out of money to pay its bills as soon as June 1 if Congress does not raise its self-imposed $31.4 trillion debt ceiling, according to Treasury Secretary Janet Yellen. Democrats say they might try to pass a "clean" debt ceiling hike, but that would be unlikely to win enough Republican votes for passage. The centerpiece of the House Republican plan would scale back a wide swath of annual government spending to last year's levels, a cut of about 8%, and cap its growth by 1% each year after that. The Republican plan does not specify how individual programs would fare. Democrats have argued that domestic spending would take the biggest hit, as Republicans would try to protect military and veterans programs.

☆ What is the debt ceiling? Why it's important and how it affects you
▼ + stars: | 2023-05-04 | by ( Greg Iacurci | ) www.cnbc.com time to read: +5 min

To avoid that outcome, lawmakers are trying to find a path forward to raise or suspend the debt ceiling, which would enable the U.S. to pay its bills on time. What is the debt ceiling? The debt ceiling is the amount of money the U.S. Department of the Treasury is authorized to borrow to pay the nation's bills. The debt ceiling wouldn't be an issue if U.S. revenues — i.e., tax proceeds — exceeded its costs. Congress can raise or temporarily suspend the debt ceiling in the interim to avert a debt-ceiling crisis — something lawmakers have done many times in the past.

☆ The cost of insuring against a US default hits an all-time high as debt ceiling deadline looms
▼ + stars: | 2023-05-04 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

The insurance cost against a US default hit a fresh high Thursday as lawmakers wrangle over raising the debt ceiling. One-year US government credit default swaps traded at 152 basis points. One-year US government credit default swaps traded at 152 basis points, surpassing trades above 134 in late April when those derivatives were the costliest since the 2008 global financial crisis. Buyers of credit default swaps, or CDS, seek insurance against a borrower that may not meet its debt-payment obligations. The bill offered to lift the debt ceiling in exchange for government spending cuts of roughly 8% in 2024, among other terms.

☆ The White House warned that a debt ceiling crisis could be just as bad as the Great Recession — and there'd be no way for the government to help anyone out
▼ + stars: | 2023-05-04 | by ( Juliana Kaplan | Ayelet Sheffey | ) www.businessinsider.com time to read: +6 min

The US could run out of money to pay its obligations as soon as June 1, as the debt ceiling looms. The White House is warning that a protracted default could be as bad as the Great Recession. Even though Speaker of the House Kevin McCarthy's bill passed the House last week, it faces a highly likely rejection in the Democratic-controlled Senate and White House. As Insider previously reported, there are some options on the table to avert a debt ceiling crisis while avoiding congressional drama. Another option would be invoking a clause in the 14th amendment that would declare the debt ceiling unconstitutional.

The market swoon from what would be an unprecedented U.S. default would bludgeon away billions more in wealth. The cost to insure U.S. government debt against default has shot to the highest since the 2007-2009 financial crisis. All of that takes air out the economy's tires and could start to push up the unemployment rate, now at a historically low 3.5%. Some top economic policymakers like those at the Fed had predicted as early as last December that the unemployment rate would be roughly 1 percentage point higher by the end of 2023. A debt crisis and a default, even if only on some of the interest payments due each day, would move it forward, Bostjancic said.

☆ White House details ‘severe damage’ to the economy if debt ceiling default occurs
▼ + stars: | 2023-05-03 | by ( Kayla Tausche | ) www.cnbc.com time to read: +3 min

US President Joe Biden speaks about the creation of new manufacturing jobs at the Washington Hilton in Washington, DC, April 25, 2023. WASHINGTON — The White House on Wednesday will publish new calculations warning about the potential damage to the U.S. economy and taxpayers should the government fail to raise the nation's debt limit. A protracted default, CEA says, would result in a Great Recession-like doomsday scenario wherein 8.3 million people lose their jobs, and the stock market falls by 45 percent. A brief default would spur 500,000 job losses, leading to a 0.3% rise in unemployment, the CEA argues. "In a breach-induced recession, there would be limited policy options to help buffer the impact on households and businesses," the White House writes in the post.

If Congress fails to act, some legal experts say Democratic President Joe Biden has another option to avert a crisis: Invoke the 14th Amendment to the U.S. Constitution to ensure the United States can continue to pay its bills. 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." HOW WOULD MARKETS REACT IF BIDEN USES THE 14TH AMENDMENT? Administration officials and economists have warned 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.

☆ The worst of the banking crisis is over, says Moody's Mark Zandi
▼ + stars: | 2023-05-01 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe worst of the banking crisis is over, says Moody's Mark ZandiMark Zandi, Moody Analytics chief economist, joins 'Squawk on the Street' to discuss Zandi's thoughts on the future bank transactions, how the First Republic closure gets folded into Powell's rate announcement and more.

☆ Analysis: American living standards are on the line in the debt ceiling drama
▼ + stars: | 2023-04-27 | by ( Christine Romans | ) edition.cnn.com time to read: +6 min

New York CNN —Inside the Beltway, jockeying over raising the debt ceiling has become a partisan ritual to gain political points. But marching toward a debt ceiling default puts American living standards on the line. For most of that time, the debt ceiling was raised with little fuss, until 2011 brought the debt ceiling into a new dangerous realm of political brinksmanship. Deciding later not to pay the bills by not raising the debt ceiling is not sound fiscal policy. Roger Ferguson, economist and former vice chair of the Fed, said the debt ceiling is out of date.

☆ Economic growth likely was solid to start the year, but that could end the good news for a while
▼ + stars: | 2023-04-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The U.S. economy likely grew at a solid pace to start the year, though things are expected to get worse before they get better. "It shows an economy that so far is resilient, weathering all kinds of storms so far and growing at pretty close to potential. Where the growth is So far, consumers have managed to withstand the higher rates. "We expect a solid 2.3% (QoQ SAAR) increase in Q1 real GDP, with details that appear even more positive for the economic backdrop. Despite rising debt levels and the prospects that financing will become more difficult to come by, consumers are in fairly solid shape.

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