US debt ceiling deal possible – House Speaker

Published May 25th, 2023 - 11:06 GMT
US debt ceiling deal possible – House Speaker
US dollar is rising - Source: Shutterstock

ALBAWABA – United States (US) House of Representatives Speaker Kevin McCarthy said a deal was possible before the June 1 deadline, on which the US could run out of money to pay its bills, Bloomberg reported Thursday.

“I still think we have time to get an agreement and get it done,” McCarthy said after meeting with the negotiators appointed by US President Joe Biden on Tuesday.

Meanwhile, Flitch Ratings has announced they may have to downgrade the credit rating of the US, given that the ongoing talks on raising the debt ceiling have not reaped any fruit.

The dollar strengthened against major currencies amid high Treasury bill yields as investors sold US government bonds, Bloomberg said.

Yields on the two-year and 10-year Treasury notes climbed to the highest level since mid-March, despite the ongoing crisis. US equity futures rallied on bullish tech news.

The US reached is debt cap in January, 2023, and has since been spending out of the Treasury Department’s extraordinary measures allocations.

In previous statements, the treasury warned that the department’s cash allocations are depleted.

Time is running out for the US government to secure a deal for raising the debt ceiling before June 1, which is the deadline for substantial payments on bills due.

If Congress fails to raise the US debt ceiling, Bloomberg estimates that the Treasury’s extraordinary measures would be exhausted within a couple of weeks.

The government’s ability to pay its debts and bills ultimately comes down to whether the treasury has enough cash.

According to Bloomberg, the government’s coffers have dropped to the lowest level since December 2021. Hence the concern, that the treasury will run out of funds by early next month if the debt limit isn’t raised or suspended before then.

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