Economy
Biden, McCarthy hope to reach deal on U.S. debt ceiling
U.S. President Joe Biden and U.S. House Speaker Kevin McCarthy are actively engaged in negotiations to expedite the process of raising the national debt ceiling. The current limit for public borrowing stands at $31.4 trillion, and the aim is to eliminate the risk of default. Defaulting on the national debt could have severe consequences for global indices such as the S&P 500 and even Bitcoin, causing significant declines.
Biden emphasized the necessity of negotiations, stating, “We will negotiate because there is no choice.” He clarified that the negotiation pertains to the budget framework and not the question of fulfilling government obligations, as all congressional leaders have agreed that default will be avoided.
House Speaker McCarthy, with whom Biden is directly consulting, believes that reaching a deal by Sunday is feasible.
The U.S. Treasury Department has warned that if Congress fails to raise the borrowing limit in a timely manner, the country could face a sovereign default as early as June 1, which would result in an economic disaster.
Republicans, who currently hold a majority in the House of Representatives with 222 votes to 213, have insisted for the past six months that Democrats must agree to reduce government spending in exchange for raising the debt ceiling set by Congress.
McCarthy, a Republican, expressed confidence that the United States would not default on its sovereign debt now that Congressional leaders and the Biden administration have entered into negotiations.
As a precautionary measure, Democratic lawmakers are introducing a special petition in the House that, if necessary, would bypass regular legislative procedures and swiftly vote on raising the government borrowing limit, according to Democratic caucus leader Hakeem Jeffries.
McCarthy stated, “I don’t think we’ll end up having a debt default.” He expressed confidence in reaching an agreement, despite the tight timeline, and emphasized that everyone involved is committed to achieving a result. McCarthy also noted that tax issues would not be part of the current negotiations.
Biden confirmed his readiness to continue the debt-ceiling talks and adjusted his Asia diplomatic tour, canceling a visit to Papua New Guinea to focus on the negotiations.
Meanwhile, Senate Majority Leader Chuck Schumer is meeting with heads of major U.S. banks, including JPMorgan and Citigroup, to discuss the issue of the debt ceiling, according to Bloomberg.
Earlier, we reported that Musk demanded to coordinate with him personally the hiring of any Tesla employee.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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