U.S. President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet today at the White House in an effort to discuss the impending debt limit crisis, according to NBC News. As McCarthy insisted on waiting for Biden’s arrival from the Group of Seven (G-7) conference held in Japan, the negotiations were briefly put on hold.
On Sunday, the G-7 summit came to an end with its participants declaring further penalties against Russia, articulating a united stance against China, and stressing the need of maintaining peace in the Taiwan Strait.
Although the stock market began the week with confidence, worries over delays in achieving a debt limit deal caused a decline in U.S. equities on Friday. In contrast, despite a small rise in producer prices, European markets ended the day stronger, with Germany’s DAX index hitting a 52-week high.
Jerome Powell, the chairman of the Federal Reserve, said on Friday that the need to raise interest rates may not be as great as previously thought. He cited the stress on the banking system and the tightening credit market as factors that may help to moderate inflation. Some economists and Federal Reserve board members, however, believe that rate increases will stop for a while before resumed at the next meeting.
James Gorman, the CEO of Morgan Stanley, revealed his intention to leave his job by the end of the year. Three internal candidates will compete for the position of next CEO. However, investors were disappointed as the bank’s shares fell by 2.66%.
Market experts are still upbeat about the second half of the year and think equities may climb further provided certain requirements are satisfied. The publication of the May PMI Composite, the minutes of the Federal Reserve meeting, and the GDP statistics are just a few of the economic reports that will provide us further information about the likelihood of market rallies this week.
The Writers Guild of America is still on strike, so focus has switched to the riveting drama surrounding the debt limit talks in the United States. A delay in negotiations until Biden’s return was suggested by McCarthy’s remarks, which raised doubt and may have contributed to market falls if they had happened over the weekend. A compromise will ultimately be made, however, as seen by Friday’s modest market declines and the stability shown by the CBOE Volatility Index, which gauges investor expectations.
The main indices had a good week, with the S&P 500 jumping 1.6 percent and the Nasdaq reaching 3%, which was their highest week since March.
In White House conversations, divergences and disagreements are normal, but it is hoped that the US would avoid destabilizing its own economy and the global financial system. Both in television dramas and the real world, the settlement of the debt limit problem continues to be a crucial situation that requires attention.
