On Friday, US President Joe Biden said that the Republican and Democratic negotiators were close to resolving a debt ceiling standoff, as the deadline for US default was pushed back to 5 June.
What is the Complete News?
Biden told the reporters that he is very close and optimistic. He said now he is hopeful that, by tonight, we’ll be able to have a deal as Democratic and Republican negotiators were close to resolving a debt ceiling standoff.
Biden added there is no indication when we’ll be giving a public announcement on closing the deal. However, it was just the strongest sign that we were about to have an agreement. But the drama in Washington has yet to end.
Allowing the government to borrow and avoid a default, triggering shockwaves through the global economy. Janet Yellen, Treasury Secretary, made a statement that when the government runs out of money, it will now be 5 June, not 1 June.
But Yellen added that extending the deadline would not change the urgency.
Yellen sent a letter to House Republican Speaker Kevin McCarthy saying waiting until the last minute to suspend or increase the debt ceiling limit could harm consumer, and business confidence, put negative impact on credit rating of the US. It would also increase short-term borrowing costs for taxpayers.
According to a report, if the deal takes shape, it must include an agreement to extend the government’s borrowing authority. It means there would be no repeat of the drama currently going on before the 2024 Presidential election.
On Republican demands for sweeping spending limits on social safety and other domestic programs, Democrats would have to offer concessions.
Nothing is Agreed
However, McCarthy made a statement that the Republican and Democratic negotiators had made progress, but there is nothing agreed to until it’s all agreed to.
Kristalina Georgieva, IMF Managing Director, said according to data, the US economy has proven resilient but urged a speedy resolution to avoid the first default in US history. She added that the US treasury market is like an anchor for the global financial system.