US reaches 'in principle' deal on debt ceiling
After weeks of political wrangling, President Joe Biden and House Speaker Kevin McCarthy reached a deal over the weekend to raise the debt ceiling by two years, to 2025, and to cap non-defense spending for the next two years.
However, both Biden and McCarthy said the agreement was the product of compromise and had received opposition from some members of their respective parties.
Meanwhile, the Freedom Caucus, a group of hard-line conservative Republicans, criticized the deal for not making deep cuts in some spending, while left-wing Democrats accused Biden of backing down on too many key issues.
The Republican-controlled House of Representatives and the Democratic-controlled Senate are expected to vote on the deal later this week. Both chambers of Congress must approve the deal by June 5 to avoid any U.S. default. That is the last date the Treasury Department estimates the federal government will run out of money.
Fed policy in focus
Currently, the market focus is on whether the Federal Reserve will raise borrowing costs for the 11th consecutive time next month or suspend the interest rate hike cycle.
ING analysts said the Fed's preferred inflation gauge, the PCE price index, came in higher than expected in April, supporting further tightening by the central bank, though some officials have previously said they remain open to keeping rates unchanged.
Before the next interest rate meeting in June, the United States will also release a number of important economic data, which may have a significant impact on the decisions of policymakers, including the May non-farm payrolls report. Economists predict that the United States added 180,000 jobs in May, a decrease from 253,000 in April. #ETH
