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    Biden Taps Philip Jefferson and Adriana Kugler for Top Fed Jobs

    President Biden announced his plan to nominate Adriana Kugler, an official at the World Bank, for a Fed governor job, while elevating Philip Jefferson to the role of vice chair.WASHINGTON — President Biden on Friday said he would nominate Adriana Kugler for a seat on the Federal Reserve Board and would elevate Philip Jefferson, a current governor, as vice chair of the central bank.If they are confirmed by the Senate, the Fed would get its first Latina board member and its second Black vice chair, a move that could both make the Fed more diverse and build out its leadership team at a challenging economic moment.Mr. Biden chose Ms. Kugler, an economist with a background in labor economics who has Colombian heritage and is the U.S. executive director of the World Bank, to fill the Fed’s only remaining open governor position on its seven-member board. In a corresponding move, he elevated Mr. Jefferson, an economist who was confirmed overwhelmingly to the board when Mr. Biden nominated him to an open governor position, to be the Fed’s vice chair.The New York Times previously reported on the expected nominations.Lael Brainard, who became head of Mr. Biden’s White House National Economic Council earlier this year, was the vice chair of the Fed until February.Because the Fed’s vice chair comes from among its seven governors, Ms. Brainard’s resignation left both a governor seat open and the vice chair role vacant. Ms. Kugler will take the open spot on the board, while Mr. Jefferson, who is already a Fed governor, will be elevated to the leadership position.The Biden administration needed to balance a complicated set of priorities as it filled those open spots at the Fed, the world’s most powerful central bank. The administration is under pressure, especially from Senator Bob Menendez, Democrat of New Jersey, to appoint a Latino or Latina to the Fed Board. And the Fed itself is at an unusually challenging juncture: It is trying to wrestle rapid inflation lower with the most aggressive policy campaign since the 1980s, one that could come at a significant cost the job market.Mr. Biden also announced that he would nominate Lisa Cook, a sitting Fed governor whose term will expire early next year, to another full 14-year term as a member of the board.“These nominees understand that this job is not a partisan one, but one that plays a critical role in pursuing maximum employment, maintaining price stability and supervising many of our nation’s financial institutions,” Mr. Biden said in statement announcing the picks.A Latino person has never served on the Fed board in the central bank’s more than 109-year history, so Ms. Kugler’s nomination would be a first if it ended in confirmation. It would also add an official with considerable experience in labor economics: Ms. Kugler, who was formerly an economist and administrator at Georgetown University, served as chief economist of the Labor Department during the Obama administration from 2011 to 2013.She has worked in the economics departments at the University of Houston and at University Pompeu Fabra in Barcelona, and she has a doctorate from the University of California, Berkeley.Mr. Menendez praised the decision in a statement on Friday, and made clear that he will support the nominees.“I for one will make it my personal mission to help ensure swift confirmations for Jefferson, Cook and Kugler,” he said.Mr. Jefferson, who took office at the Fed last May, is an economist who most recently served as an administrator at Davidson College and has a doctorate in economics from the University of Virginia. During his tenure at the Fed, he has built a reputation as an inquisitive listener with an interest in staff economic research.Mr. Jefferson was born in Washington D.C., in a neighborhood called Kingman Park. During his confirmation hearing to be a Fed governor, he recalled that in his youth, “it was a place where the line between a future of success or struggle was thin.”If confirmed, he would be the second Black person to reach such an elevated position at the Fed, following Roger W. Ferguson Jr., an economist and business executive. More

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    Once an Evangelist for Airbnbs, She Now Crusades for Affordable Housing

    Precious Price ditched her profitable business of renting home stays to tourists to combat the mounting housing crisis.“Making It Work” is a series is about small-business owners striving to endure hard times.When Precious Price bought her first home four years ago in Atlanta while working as a marketing consultant, she took advantage of her frequent business trips by renting out her house on Airbnb during her absences. “I knew I wanted to use that as a rental or investment property,” she said. “I began doing that, and it was honestly very lucrative.”For Ms. Price, 27, and other young entrepreneurs of color, online short-term rental platforms like Airbnb and Vrbo represented a path to building wealth on their own terms. With an excellent credit score and minimal start-up capital — a primary barrier for people in this demographic — a professional Airbnb host could amass a stable of apartments on long-term leases, then turn around and rent those properties on a nightly basis to vacationers.Some of these entrepreneurs see it as a more equitable alternative to corporate America, with its legacy of institutionalized bias and inflexibility toward caregivers and working parents. Others are motivated by the desire to cater to Black travelers, who say they still face discrimination even after platforms like Airbnb promised to address issues like documented cases of bias.Ms. Price became an evangelist of sorts, establishing social media channels to teach other would-be entrepreneurs how to follow in her footsteps, and churning out a digital library’s worth of videos, tutorials and advice using the handle @AirbnbMoney.The irony was not lost on Ms. Price that her grand real estate ambitions were propelled by the 296-square-foot “tiny house” she spent nearly six months building for herself in her backyard. When the coronavirus pandemic slammed the brakes on travel, grounding her road-warrior lifestyle and evaporating her supplemental income stream virtually overnight, her tiny house allowed her to continue renting out her primary home and making a large profit.She even added to her portfolio, buying a second house and renting several furnished apartments in Atlanta’s popular Midtown neighborhood, and she eventually left her consulting job to manage her rental business full time.“It was a freeing experience at the time,” she said. “I’m making a ton of money that most of my family has never seen in their lifetime.”Ms. Price was earning as much as $12,000 a month and deriving a sense of purpose from her work on social media helping her peers achieve financial security. Initially, she said she had no interest in renting to long-term tenants — the profit margin for tourist bookings was so much higher.“I was adamant about only renting to vacationers,” Ms. Price said. “I was just so heavily into the rat race.”Then, the distressing messages started to come. First one or two, then too many to ignore: a litany of increasingly distraught calls and emails from people who didn’t want her Airbnbs for a weekend away — they were in desperate need of a place to call home.Ms. Price at the Emerging Founders program at Atlanta Tech Village, where she got support developing a resource hub to help homeowners of color build tiny homes.Lynsey Weatherspoon for The New York TimesMs. Price realized she was on the front lines of a housing crisis. By renting property to tourists rather than long-term renters, she and others like her were exacerbating the nation’s housing affordability problem, as she related in a 2022 TEDxAtlanta talk. “I started to realize that conversation began happening across the country,” she said.The pleas and stories of financial precariousness hit home for Ms. Price, the oldest of five siblings and a first-generation college graduate. She went to business school at Indiana University. “When I started to get these calls from single mothers and students, I started to realize that’s the identity of some of my family members,” she said. “And I’m realizing the connection of how I’m not very far removed at all from that.”She began to re-examine her values and to walk away from the lucrative vacation-rental business. She stopped listing properties on short-term rental sites, and over the next several months, she shed her rental portfolio. “Everyone has their own ethical compass and for me, mine felt just off with what I was doing,” Ms. Price said.The few remaining tenants she has now are on long-term leases, and the rent she collects is enough to cover her costs, with maybe “a couple hundred dollars left over,” she said. She supplements that income with freelance consulting and public speaking gigs. Although she is earning a fraction of her former income, she is more fulfilled and no longer feeling burned out, she said.The housing crisis Ms. Price witnessed in Atlanta is playing out across the nation. The United States is short about 6.5 million single-family homes, according to the National Association of Realtors. For more than a decade, homes were not built fast enough to keep pace with population growth, a trend that was exacerbated by the pandemic. During this time, demand for larger homes grew even as construction slowed, hamstrung first by public health restrictions, then by a labor shortage and supply-chain issues that made everything from copper pipe to carpet scarcer and more expensive.The number of affordable houses has plunged: Only 10 percent of new homes cost less than $300,000 as of the fourth quarter of 2022, even as mortgage rates have roughly doubled over the past year.These challenges have a cascading effect that has driven up rents, as well: Moody’s Analytics found that the average renter now spends more than 30 percent of their income on rent.“If you look at rental vacancy rates, they’re extremely low,” said Whitney Airgood-Obrycki, a senior research associate at the Joint Center for Housing Studies at Harvard University. “It’s really hard for people to find an affordable place to move to. It’s extremely tight, especially for low-income renters.”As Ms. Price experienced up close, a growing number of municipalities — including Atlanta — have emerged from the pandemic only to find a full-blown housing crisis on their doorsteps. Lawmakers are seeking greater regulation of short-term rentals, with many trying to discourage “professional hosts,” as opposed to homeowners who are renting out part or all of their primary home.Policies should be nuanced enough to distinguish between the two categories of renters, said Ingrid Gould Ellen, a professor of urban policy and planning at New York University, and faculty director of the university’s Furman Center for Real Estate and Urban Policy.“Airbnb can be a really useful tool for a lot of people, for homeowners who are maybe struggling to make their mortgage payments, or even renters who want to occasionally make some income and rent their units while they’re away on vacation,” she said. “Those are all forms of usage that don’t actually restrict the long-term supply of housing.”Ms. Price’s experience with the tiny house in her backyard inspired her to search for another way for people to add housing — and for homeowners to generate rental income. These units, known colloquially as “tiny homes” or “granny flats” and identified formally as accessory dwelling units, can take the form of tiny homes, guest cottages, or apartments that are either stand-alone or attached to the primary house. An increasing number of policymakers are hoping these units can help take some of the pressure off the tight housing market.Living in roughly 300 square feet lets Ms. Price earn income renting out her primary house.Lynsey Weatherspoon for The New York Times“She’s working on a pressing problem — the lack of housing supply across the U.S.,” said Praveen Ghanta, a technology entrepreneur who began the Emerging Founders program, a start-up incubator for Black, Latino and female founders in Atlanta. Ms. Price, a participant in the program, is working on a start-up she named Landrift, which is intended to be a resource hub so that homeowners — particularly homeowners of color — can increase the value of their properties and generate income by building their own tiny homes. “We can make a meaningful impact, particularly in markets like Atlanta,” Mr. Ghanta said.“Sometimes I think people get fixated on the notion of affordable housing and that it has to be nonprofit,” he said. “The reality is there’s a lot of both money to be made and housing to be supplied, even within market rate constructs.”Ms. Price has reoriented her social media platforms away from the management of short-term rental properties and toward the promotion of small-scale development of accessory dwelling units. “At this point I do want to begin acquiring other properties,” she said. She is looking for houses with enough land to accommodate a tiny house while building a second ancillary structure — a guest cottage — on her first property.“My plan is to get a property I would be able to do some kind of housing on so I’m not just taking housing, but would be able to make more housing,” she said. “The American dream is real estate.” More

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    UK economy grows by 0.1% in the first quarter but inflation continues to weigh

    The U.K. economy grew by 0.1% in the first quarter, but showed an unexpected 0.3% contraction in March.
    Construction and manufacturing showed solid growth, but services were hit by declines in wholesale and retail trade, while household incomes remained squeezed and strike action hampered growth.
    The Bank of England on Thursday said it no longer expected the U.K. to enter a recession this year.

    A member of the public walks through heavy rain near the Bank of England in May 2023.
    Dan Kitwood | Getty Images News | Getty Images

    LONDON — The U.K. economy grew by 0.1% in the first quarter, following an unexpected contraction in March, official figures showed on Friday.
    Economists polled by Reuters had forecast the same growth figure for the first three months of the year, but expected stagnation in March, versus the 0.3% fall recorded.

    The construction sector expanded by 0.7%, while manufacturing performance went up by 0.5% in the first quarter, with 0.1% growth logged in services and production. On a monthly basis, services dropped by 0.5% in March, particularly because of declines in wholesale and retail trade and motor repairs.
    The national statistics agency said there was no growth in real household expenditure, as incomes remained under the squeeze of higher prices.
    “I think the U.K. is back, and those are numbers that no one would have predicted even three months ago,” U.K. Finance Minister Jeremy Hunt told CNBC at a G-7 summit in Niigata, Japan.
    “But I think we are aware there is still a long way to go. We still have inflation that is too high, growth is still not as high as we would like it to be, and when I talk to my fellow finance ministers we all talk about the same thing. Labor supply, productivity, how we are going to increase our long-term growth rates so that we can pay for the increasing number of things that tax payers want governments to do,” Hunt continued.
    Ruth Gregory, deputy chief U.K. economist at Capital Economics, said in a note that the quarterly figure “suggests that low real income and high interest rates, as well as the unusually wet weather, are dampening activity,” also citing widespread strike action this year. She assessed that declines in government consumption and net trade made for “gloomy reading.”

    “There’s still no recession, but with the full drag from higher interest rates yet to be felt it is too soon to sound the all-clear,” Gregory added.

    Persistent inflation

    U.K. growth has been muted so far this year, coming in at 0.4% in January and flat in February, after the economy narrowly avoided a technical recession in 2022.
    Inflation remains a more severe blight on the U.K. than on other major economies, with the March reading still above 10%.
    The Bank of England on Thursday raised interest rates by 25 basis points to 4.5% making its twelfth consecutive hike in an attempt to combat stubbornly high prices. More optimistically, the central bank said it no longer expects the U.K. to enter a recession this year, despite previously forecasting its longest-ever recession.
    The Bank of England now forecasts the U.K. GDP will be flat over the first half of this year, growing 0.9% by the middle of 2024 and 0.7% by mid-2025. 
    “It may be the biggest upgrade we’ve ever done,” BoE Governor Andrew Bailey told CNBC on Thursday, defending the revision as the result of a changing picture from conditional data, including financial markets, commodity prices and government policy.
    “The level is still quite low though, let’s be honest,” Bailey added.
    The euro zone recorded just 0.1% growth in the first quarter of the year, with Germany — the bloc’s biggest economy — stagnating. More

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    Meeting Between Biden and Republicans Delayed as Sides Pursue Debt Limit Deal

    The decision to delay Friday’s expected meeting to next week was cast as a positive development, one that could allow officials to find agreement before the United States defaults on its debt.President Biden and top congressional leaders on Thursday postponed a second meeting on the debt limit crisis to give staff members more time to explore a budget deal before the two sides convened again.People familiar with the decision cast the move as a positive development. Preliminary budget talks among senior White House officials and congressional aides have been underway for two days, with both sides attempting to find a path to an agreement on lifting the government’s debt limit and avoiding a default.Mr. Biden and the four top congressional leaders, including Speaker Kevin McCarthy, were originally scheduled to meet again Friday after an initial face-to-face session on Tuesday produced no agreement. A new meeting is expected next week before Mr. Biden departs on Wednesday for Japan to attend the Group of 7 leaders meeting.The delay seems to suggest progress at a pivotal moment. Until now, both sides appeared dug in on their respective positions about what it would take to raise the nation’s debt limit, which caps how much money the United States can borrow. That $31.4 trillion limit was hit on Jan. 19, and the Treasury Department has been using accounting maneuvers to keep paying America’s bills without breaching that debt ceiling.Mr. McCarthy has insisted on deep spending cuts and a rollback of Mr. Biden’s clean energy agenda as a prerequisite to raising the debt limit. Mr. Biden has insisted that Republicans raise the borrowing cap, arguing it simply allows the United States to pay bills that Congress has already approved.House Republicans who have been pressing the White House and Senate Democrats to negotiate said on Thursday that the opening of discussions about spending limits and other proposals was spurring some optimism that an agreement could be reached before June 1.“The last 48 hours have given us some more reason for hope,” said Representative Dusty Johnson, Republican of South Dakota and the leader of the Main Street Caucus, an influential group of mainstream conservatives.Still, Mr. McCarthy downplayed the bargaining sessions, saying that with a June 1 deadline looming for a possible default, the pace was not fast enough.“We have a short time period,” Mr. McCarthy told reporters on Thursday. “If this were staff meetings happening on Feb. 1, I’d call them productive. When you are sitting here with a few, 15 days to go, it really seems to me that the president finally felt the pressure for 100 days of not having a meeting with me.”In the wake of Tuesday’s White House session, Biden administration representatives and congressional leadership offices have gathered in closed meetings on Capitol Hill to exchange ideas on a potential spending and policy deal.Congressional officials said it made sense to put off the higher-level meeting since Mr. Biden and congressional leaders would have little new to discuss so quickly after their last discussion. Among the concerns were that another meeting with little progress to report would sow doubts about Washington’s ability to prevent an economically devastating default.Both sides have continued to talk this week and people familiar with the discussion, which ran about two hours each on Wednesday and Thursday, said some broad areas of negotiation had emerged, including fixed caps on federal spending, reclaiming unspent funds designated for the Covid emergency, stiffer work requirements for federal benefits and expedited permitting rules for energy projects.The negotiations between Biden administration and congressional staff members, which Mr. Biden and Mr. McCarthy announced after the initial Tuesday meeting at the White House, represent a new frontier in the discussions over raising the debt limit. The talks are effectively an early version of annual budget discussions, which usually heat up in late summer. Given Mr. Biden’s pledge to not negotiate over an increase in the debt limit, administration officials have taken pains to describe them as the normal course of business.“That’s regular order,” White House spokeswoman Karine Jean-Pierre said Thursday, about the meetings. “That is something that has been done year after year to talk about appropriations.”But the timing of the discussions — and the fact that any agreement they produce would almost certainly be included in a bipartisan bill to raise the debt limit ahead of a potential default as soon as next month — suggests Mr. Biden is negotiating over the debt limit despite the insistence that the two issues are separate.The White House has sent staff members from the Office of Management and Budget and the National Economic Council to the talks, and the offices of the top two Democratic and Republican congressional leaders have dispatched aides with experience in fiscal policy and cutting major spending deals.As a starting point, administration officials have rejected any agreement with Mr. McCarthy that rolls back Mr. Biden’s signature legislative achievements, most notably on climate change. They are insisting Republicans drop significant provisions in the debt limit bill that passed the House last month, including the repeal of most of Mr. Biden’s new tax incentives for clean energy.On the narrower question of discretionary spending levels, administration officials are pushing for significantly smaller cuts than Republicans approved last month. They want shorter-term caps in spending than the decade-long caps in the Republican bill. And they want to base those caps off a higher spending level than Republicans do — the amount in this year’s government funding bill, which Mr. Biden signed in December. Republicans’ plan caps spending growth from the 2022 fiscal year.White House negotiators have also pushed to exclude consideration of Republican efforts to roll back funding for the Internal Revenue Service to crack down on tax cheats, as well as for work requirements for Medicaid and food stamp recipients.The duration of a debt limit increase is also emerging as a line in the sand, with the White House insisting on a higher increase than Republicans have floated. Both sides could agree to raise the limit for only a couple of months as they seek to finish budget negotiations. But Mr. Biden’s aides want to avoid such a short-term solution and do not want to conduct an entirely new round of negotiations next year. As a result, any larger budget deal would likely need to raise the limit for borrowing needs past the next presidential election, instead of into early next year, as the Republican bill did.Republicans acknowledge that the White House has laid down numerous red lines but say that the president will have to relent in some areas if an agreement is to be struck.“None of us, nobody in this room, thinks Joe Biden will get everything he wants in this deal,” said Mr. Johnson. “That means by definition he will have to accept a number of things he says he refuses to accept.”“We’re not going to negotiate with ourselves,” said Representative Garret Graves, a Louisiana Republican deputized by Mr. McCarthy to shepherd Republicans through the debt ceiling showdown. “We’re going to have substantial savings moving forward.”Biden administration officials are also open to striking a deal with Republicans on accelerating permitting for a wide range of energy projects, including wind, oil, gas and solar — a top priority of Senator Joe Manchin III, Democrat of West Virginia.Any final agreement would need the endorsement of both Mr. Biden, Mr. McCarthy and Senate Democrats, and final approval would most likely need to be bipartisan since many of the hard-right House conservatives who voted for the House debt limit increase said they would not support anything less than what the House passed.Officials also hope a final agreement could win approval from business groups, adding pressure on Republicans. Such concerns prompted U.S. Chamber of Commerce officials this month to outline potential paths to a debt limit deal. More

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    Fed Governor Waller casts doubt on need to conduct climate change tests for banks

    Fed Governor Christopher Waller on Thursday cast doubt on the need for special focus on how banks are preparing for climate change risks.
    “Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States,” Waller said.

    Christopher Waller, governor of the US Federal Reserve, during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022.
    Al Drago | Bloomberg | Getty Images

    Federal Reserve Governor Christopher Waller on Thursday cast doubt on the need for special focus on how banks are preparing for climate change risks.
    While acknowledging the risks that climate change poses, he said catastrophic events like hurricanes and floods don’t generally reverberate across the U.S. economy. Thus, he said that conducting special tests for how banks are preparing for such events probably shouldn’t fall under the Fed’s purview.

    “I don’t see a need for special treatment for climate-related risks in our financial stability monitoring and policies,” Waller said in the prepared remarks for a speech in Madrid. “Based on what I’ve seen so far, I believe that placing an outsized focus on climate-related risks is not needed, and the Federal Reserve should focus on more near-term and material risks in keeping with our mandate.”
    Nevertheless, the Fed already has directed the nation’s six largest banks to show plans for how they would respond to climate-related events.
    While separate from the stress tests the Fed conducts on systemically important institutions, the exercises bear similarities. The stress tests focus on how banks would respond to financial and economic crises.
    “Climate change is real, but I do not believe it poses a serious risk to the safety and soundness of large banks or the financial stability of the United States,” Waller said. “There is no need for us to focus on one set of risks in a way that crowds out our focus on others.”
    He noted that events such as forest fires and other climate-connected disasters are “devastating to local communities. But they are not material enough to pose an outsized risk to the overall U.S. economy.”

    Waller added that households and businesses, including banks, have shown the ability to adapt to changes. Bank performance, he said, is generally not affected by disasters in their regions.
    Fed officials for the past three years or so have been debating how much emphasis should be placed on climate risks. A financial stability report in 2020 first addressed the topic. More

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    Yellen Calls Invoking 14th Amendment to Raise Debt Limit ‘Legally Questionable’

    The Treasury secretary warned that a default would lead to a “very substantial downturn.”Treasury Secretary Janet L. Yellen on Thursday downplayed the possibility that President Biden could essentially ignore the debt limit by invoking the 14th Amendment, calling the idea “legally questionable.”Her comments come as lawmakers and the Biden administration remain locked in a standoff over whether and how to raise the debt ceiling, which caps how much money the federal government can borrow. Ms. Yellen warned lawmakers last week that the United States could run out of money to pay its bills on time by June 1.Mr. Biden is scheduled to meet with top congressional leaders again on Friday, after an initial meeting on Tuesday failed to elicit an agreement.The brinkmanship has raised questions about whether the Biden administration can act on its own to raise the $31.4 trillion borrowing cap by relying on a clause in the 14th Amendment stating that “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”The strategy would effectively be a constitutional challenge to the debt limit. Under the theory, the government would be required by the 14th Amendment to continue issuing new debt to pay bondholders, Social Security recipients, government employees and others, even if Congress fails to lift the limit before the so-called X-date.Ms. Yellen, however, continued to dismiss that notion.“There would clearly be litigation around that; it’s not a short-run solution,” Ms. Yellen said at a news conference in Japan before a meeting of finance ministers from the Group of 7 nations. “It’s legally questionable whether or not that’s a viable strategy.”Biden administration officials have studied the idea, but the president also voiced similar skepticism this week after meeting with Speaker Kevin McCarthy and predicted that unilateral action to raise the debt limit without Congress would spur litigation.As she prepared to meet with her international counterparts, Ms. Yellen warned that failing to lift the debt limit would have dire consequences for the United States and the world economy. She noted the significant uncertainty associated with a default but predicted that a sharp decline in government spending combined with the expected turmoil in financial markets would lead to a “very substantial downturn.”“A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery,” Ms. Yellen said. “And it would spark a global downturn that would set us back much further.”She added: “It would also risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests.” More

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    Wholesale prices rose just 0.2% in April, less than estimate as inflation pressures ease

    Wholesale prices rose less than expected in April, according to a Labor Department report Thursday that provides more hope that inflation is at least trending lower.
    The producer price index, a measure of prices for final demand goods and services, increased 0.2%, against the Dow Jones estimate for 0.3%. Excluding food and energy, core PPI also rose 0.2%, in line with expectations.

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    17 hours ago

    On an annual basis, headline PPI increased just 2.3%, down from 2.7% in March and the lowest reading since January 2021.
    Though the PPI rise was less than expected, the services index increased 0.3%, the biggest move since November 2022, the Bureau of Labor Statistics report stated.
    A separate Labor Department report Thursday showed that jobless claims for the week ended May 6 jumped to 264,000, an increase of 22,000 from the previous period. The total was well above the Dow Jones estimate for 245,000 and the highest reading since Oct. 30, 2021.
    This is breaking news. Please check back here for updates. More

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    German minister calls for maturity on U.S. debt ceiling talks: ‘We have to avoid further risks’

    Time is running out for an agreement, with U.S. Treasury Secretary Janet Yellen warning earlier this month that without a deal, the largest economy in the world could default by June 1.
    Democratic leaders want the limit to be raised but Republican lawmakers have called for spending cuts to be agreed before anything is approved.

    Christian Lindner, German finance minister, told CNBC he hopes the U.S. will avoid adding further problems to the global economy.
    Johannes Simon | Getty Images News | Getty Images

    German Finance Minister Christian Lindner hopes American lawmakers will be “mature” over the debt ceiling negotiations to avoid further headwinds for the global economy.
    U.S. Congress is trying to find a compromise on the debt limit — which refers to the maximum amount of money that the two chambers allow the federal government to borrow. Democratic leaders want the limit to be raised but Republican lawmakers have called for spending cuts to be agreed before anything is approved.

    Time is running out for an agreement, with U.S. Treasury Secretary Janet Yellen warning earlier this month that without a deal, the largest economy in the world could default by June 1.
    “There is a high level of uncertainty, we have to stabilize the economic development, we have to further fight inflation and in this situation everyone has to be responsible, we have to avoid further risks, especially risks which are in our hands to decide on,” Christian Lindner, the German finance minister, said at the sidelines of a G-7 meeting in Japan.
    “I cannot comment on domestic politics in other countries, but I hope everyone is mature in this situation and avoids further risks for the global economic development,” he told CNBC’s Martin Soong.
    Speaking earlier Thursday at a press conference, also at the G-7 meeting, Yellen said a U.S. default would threaten the global economy. U.S. President Joe Biden had previously warned that differences with the Republican Party over the debt ceiling risk a recession.

    “We have severe risks, a high level of uncertainty, we have still high inflation rates, we have not yet come back to the growth we need at the global level and so, in this situation, nobody would understand if domestic U.S. politics would cause further trouble for the global economy,” Lindner said.
    Eurogroup President Paschal Donohoe also told CNBC at the G-7 meetings that this is a “vital” development for the global economy. “We appreciate how sensitive this issue is in American politics, but at the same time the resolution of this issue is vital, not just for America, but it also plays such a vital role in the economic stability of our world,” he said. More