Aurelia Butler

“I’ve not gotten there yet,” Biden said in an interview with MSNBC when asked about the possibility of invoking the amendment.The divided U.S. Congress is running out of time to raise the federal government’s $31.4 trillion debt ceiling, with the Treasury Department warning it could be unable to pay its bills as soon as June 1.If Congress fails to act, some legal experts say Biden has another option to avert a crisis: Invoke the 14th Amendment to the U.S. Constitution to ensure the United States can continue to pay its bills.Section Four of the amendment, adopted after the 1861-1865 Civil War, states that the “validity of the public debt of the United States … shall not be questioned.” But the clause has been largely unaddressed by the courts.Some experts have suggested that Biden could invoke this amendment to raise the debt ceiling on his own if Congress does not act. That would almost certainly lead to prolonged legal wrangling, which could unsettle financial marketsWhite House and other administration officials have examined the possibility but many have dismissed it as a last ditch solution unlikely to survive a court challenge, according to a person briefed on those discussions.Biden and top Republicans and Democrats from the U.S. Congress will sit down on Tuesday next week to try to end the three-month standoff over the federal debt ceiling and avoid a crippling default before the end of the month.The two sides go in with clear positions: Biden is calling on lawmakers to raise the federal government’s self-imposed borrowing limit without conditions, and Republican House Speaker Kevin McCarthy says his chamber will not approve any deal that doesn’t cut spending to address the nation’s growing budget deficit. More

China’s foreign minister will meet officials from the Taliban at the weekend as Beijing explores boosting investment in Afghanistan, including bringing the crisis-hit country into its Belt and Road infrastructure project.Qin Gang will hold talks on Saturday in Pakistan with Afghanistan’s acting foreign minister, Amir Khan Muttaqi, and Pakistan’s Bilawal Bhutto Zardari on Saturday as part of the China-Pakistan-Afghanistan Trilateral Foreign Ministers’ Dialogue.The three ministers will discuss “regional stability and transit”, according to Afghanistan’s foreign ministry, along with boosting trade ties.The meeting comes after China’s foreign ministry said last month that it “welcomes Afghanistan’s participation in Belt and Road co-operation and supports Afghanistan’s integration into regional economic co-operation and connectivity”.Since ousting the Nato-backed government in 2021 after two-decades of war, the Taliban have courted global powers including China and Russia for investment to shore up the crumbling economy and ease the regime’s international isolation.This includes efforts to attract Chinese infrastructure investment to connect Afghanistan with neighbours, such as Pakistan, through BRI.Beijing has invested billions in Pakistan through the ambitious China-Pakistan Economic Corridor, an under-construction network of roads, trains and ports which is ultimately expected to be worth up to $60bn.“The idea is to engage Afghanistan in economic activity that has already linked China and Pakistan together,” a Pakistani official told the Financial Times.Chinese and Afghan officials said in January that the state-run Xinjiang Central Asia Petroleum and Gas Company had agreed a deal to drill for oil in the country. The Taliban also last year agreed a deal with Russia to source oil and wheat.But while Afghanistan’s rich, unexplored reserves of minerals such as lithium and copper have long enticed foreign nations, meaningful investment in infrastructure or mining has so far proved prohibitively difficult because of the precarious security situation.State-owned China Metallurgical Group Corporation in 2007 secured the rights to Mes Aynak, one of the world’s largest known copper reserves, but did not develop it.Afghanistan has suffered an economic catastrophe since the Taliban’s return prompted the US and its allies to cut off most financing.UN secretary-general António Gutteres this week said the country was trapped in “the largest humanitarian crisis in the world today”. Around 28mn people, or two-thirds of its population, require aid with six million people approaching famine, according to the UN.The Taliban have also imposed their hardline ideology, banning girls and women from education and work. This has prompted many foreign governments to break off engagement with the group.China and Pakistan both consider maintaining ties with the Taliban as vital to their security. Analysts say that Afghanistan is a base for several regional terrorist groups including the Tehreek-e-Taliban Pakistan, which Pakistani officials blame for a surge of violence, as well as Uyghur militant group the East Turkestan Islamic Movement.The deteriorating situation has provoked alarm around the region. Russia’s foreign minister Sergei Lavrov met his Pakistani counterpart Bhutto Zardari this week in India, at which the pair discussed the situation in Afghanistan.In remarks to journalists, Lavrov said he expected the Taliban to “deliver (on) their promises to come up with an inclusive government . . . [and] ensuring the representation of the full spectrum of political forces in Afghanistan”. He added: “This hasn’t been done yet.”  More

NEW YORK (Reuters) – Fears of stagflation are percolating on Wall Street, as investors await data that could shed light on whether the Federal Reserve is succeeding in tamping down inflation without badly hurting growth.Stagflation – a combination of stagnant growth and persistent inflation that dogged the U.S. in the 1970s – dims the appeal of both equities and bonds, leaving investors fewer places to earn returns. While far from assured, the scenario has loomed large in investors’ minds as last year’s inflation surge forced the Fed to launch an aggressive monetary policy tightening cycle that many expect to bring on a recession. Some also believe the recent banking sector tumult will hurt lending and further constrain growth, forcing the Fed to cut rates before inflation is tamed. April’s survey of global fund managers from BoFA Global Research showed stagflation expectations near historical highs, with 86% saying it will be part of the macroeconomic backdrop in 2024. Next week’s consumer price data for April, due on Wednesday, May 10, could offer a clearer picture of whether the Fed’s interest rate increases are cooling inflation. A strong number could weigh on a rally that has lifted the S&P 500 nearly 8% this year.“Stagflation is a growing concern,” said Phil Orlando, chief equity market strategist at Federated Hermes (NYSE:FHI). “Inflation is a lot higher than the Fed thought it would be, and it’s coming down at an extraordinarily slow pace while we think the economy has already hit its high water mark for the year.” U.S employment data on Friday showed hourly wages grew in April at an annual rate of 4.4%, too strong to be consistent with the Fed’s 2% inflation target. Growth remained robust, however, with job creation accelerating and the unemployment rate falling to a 53-year low.Still, bets in futures markets continued to show traders pricing interest rate cuts later this year. Policymakers have insisted they will keep rates at around current level for the remainder of 2023 after raising them another 25 basis points this week. Jose Torres, senior economist at Interactive Brokers (NASDAQ:IBKR), believes the U.S. will fall into recession later this year. Factors including higher commodity prices and a shift to local supply chains from global ones are likely to keep inflation elevated even as growth declines, Torres said. He has become more bullish on dividend paying stocks in sectors such as utilities, expecting the extra income to buttress returns as inflation weighs on equity valuations and the S&P 500 treads water. “The Fed made the mistake of being too accommodative for too long,” Torres said. “It will take more time than the market expects to get the U.S. back to being a 2% inflation country.” Consumer prices rose by 5.0% in March, far above levels seen over most of the past decade though down from last June’s peak of 9.1%. U.S. economic growth slowed more than expected in the first quarter, while activity in the manufacturing sector remained depressed last month. Past episodes of stagflation have weighed on stocks. The S&P 500 fell a median of 2.1% during quarters marked by stagflation over the last 60 years, while rising a median 2.5% during all other quarters, according to Goldman Sachs (NYSE:GS).Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:LPLA), has been buying gold. Prices for the metal, a popular inflation hedge and haven during uncertain times, have surged to a near record high this year, lifted by geopolitical worries and a looming showdown over the U.S. debt ceiling.”It looks to me that gold is sniffing out a tinge of stagflation,” said Krosby, who has also added positions to equity sectors she expects to better weather economic turbulence, such as consumer staples. Other investors were more optimistic, believing growth will hold up.Charlie McElligott, managing director of cross-asset macro strategy at Nomura Securities, pointed to the Atlanta Fed’s GDPNow estimate, which is projecting a 2.7% growth rate in the second quarter, up from 1.8% on May 1. At the same time, expectations that the Fed is unlikely to raise rates much higher has created a better backdrop for investors, he said.”Everybody is positioned for the end of the world, but when you know that the Fed is out of the hiking game … it’s a much sturdier footing for investors than anybody anticipated at this point in 2023,” he said. More

Since the FDIC does not regulate nonbanks, the firms cannot bid for an entire lender but such a move could entice them to buy loans and assets at a discount from collapsed institutions and help the FDIC get higher bids, the report said.The FDIC did not immediately respond to a Reuters request for comment. Earlier this week, JPMorgan (NYSE:JPM) entered into a loss-sharing agreement with the FDIC when it agreed to assume all of First Republic’s deposits but share losses on certain portfolios including residential and commercial loans. Last month, the FDIC retained asset manager BlackRock (NYSE:BLK)’s financial markets advisory unit to sell two portfolios with face values of nearly $27 billion and $8 billion, according to its website, after the collapse of Signature Bank and Silicon Valley Bank. More