The US Senate passed the debt ceiling bill with overwhelming bipartisan support yesterday, approving a fiscal deal between the White House and congressional Republicans to end a weeks-long political stand-off that risked triggering an unprecedented debt default in the world’s largest economy.
With a vote of 63 to 36, the bill now heads to President Joe Biden for his signature, just four days before the US Treasury projected it would run out of cash to pay all its bills. Such a scenario would have dealt a traumatic hit to the global economy and financial markets and represented a huge self-inflicted wound for Washington.
“Senators from both parties voted to protect the hard-earned economic progress we have made and prevent a first-ever default by the United States,” Biden said in a statement after the vote. “Together, they demonstrated once more that America is a nation that pays its bills and meets its obligations — and always will be.”
The agreement raises the US borrowing limit until 2025 and sets caps on government spending for the next two years, putting more restrictions on US fiscal policy until at least after the next presidential election.
Related: Oil prices and European stocks rose after the US passed a bill to raise the country’s debt limit.
Here’s what else I’m watching in the days ahead:
Economic data: The US employment report is expected to show that jobs growth cooled last month. The Bureau of Labor Statistics will release the data at 8:30am Eastern Time today.
World Bank: Former Mastercard chief executive Ajay Banga starts a five-year term as president today.
Shangri-La Dialogue: The security forum runs until Sunday in Singapore, with defence chiefs of the US and China expected to speak separately after Beijing declined a meeting between both leaders.
Five more top stories
1. Exclusive: The west must “take account” of Russian president Vladimir Putin’s security concerns and stop the slide towards a Versailles-style victors’ peace in Ukraine, said Brazil’s top foreign policy adviser and former foreign minister. Read the full Financial Times interview with Celso Amorim.
Related: The US Department of Defense has agreed to buy Starlink terminals from Elon Musk’s SpaceX to provide satellite internet to Ukraine’s military.
2. Nvidia is one of the few companies that will sustain this year’s rebound in US stocks even as rapid advances in artificial intelligence “create more losers than winners”, according to one of the biggest recent buyers of the chipmaker’s shares. Read more from GQG Partners founder Rajiv Jain’s remarks.
More AI: Not all transformative technologies destroy jobs, and some could help to level the playing field, writes Tim Harford.
3. Australia’s largest pension fund — AustralianSuper — has said it will not sign any new contracts with PwC. The consulting firm has been under intense public scrutiny over the past month after the release of emails showing it had used confidential information about changes to tax laws from the government to win new business.
4. June 4 marks the 34th anniversary of the Tiananmen Square protest. Hong Kong was known for holding the biggest Tiananmen remembrance event on Chinese territory. But after a crackdown on pro-democracy protests and the introduction of a sweeping national security law by Beijing in 2020, dissent has been stamped out.
5. Saudi Arabia is planning a second lithium processing facility, as it steps up efforts to work with western partners to develop its battery supply chain. The facility, which will use feedstock mined in Austria to produce refined lithium hydroxide for BMW, is a sign of how supply chains to process the metal are slowly developing outside China.
How well did you keep up with the news this week? Take our quiz.
The Big Read
When Joe Biden took office, there was some concern that he might adopt a weaker approach on China than his predecessor Donald Trump, who took a much sharper position than previous US presidents. But Biden has taken an unexpectedly tough stance, stepping up security initiatives to boost deterrence and better prepare for potential conflict over Taiwan. Here’s how the US is deepening military alliances in China’s backyard.
We’re also reading . . .
Gazprom’s militias: Russia’s state gas company has recruited, equipped and paid security guards to join the invasion of Ukraine.
Rocket Internet: Oliver Samwer has quietly transformed one of Europe’s most aggressive venture capital firms into a more conservative — and potentially more lucrative — investment house.
BMG boss bows out: Hartwig Masuch, the man who helped the Berlin-based music group become a challenger to bigger labels in the streaming era, is leaving after 15 years as chief executive.
Chart of the day
Binance has lost a quarter of its market share in the past three months as a US watchdog pursues it for alleged violation of federal laws. It controls 43 per cent of the average monthly volume on global cryptocurrency exchanges, down from 57.5 per cent in February, according to research provider CCData. Here’s why the world’s largest crypto exchange has experienced the sharp decline.
Take a break from the news
Few artists have probed the illusions of identity like Cindy Sherman, who made her reputation in the 1970s with the “Untitled Film Stills” series featuring photographs of jilted lovers and careworn starlets from lost Hitchcock or Antonioni films. See her newest work, shared exclusively with the FT.
Additional contributions by Tee Zhuo and Vita Dadoo Lomeli
Source: Economy - ft.com
