Debt ceiling drama is just a regular earmarking campaign

Don't ruin the illusion, let's pretend it is all serious


The financial markets are likely to keep an eye on the negotiations on an increase in the US debt ceiling in the new stock market week. Without political agreement, the United States would run out of money around June 1. This can cause major financial turmoil worldwide.

There was still hope on the trading floors last week that the parties would succeed in reaching an agreement quickly. But on Friday, negotiations on the debt ceiling were interrupted because the delegations could not agree. This weekend, President Joe Biden’s absence seemed to be hindering further progress in the talks. Biden was in Japan to attend the G7 summit.

European Central Bank (ECB) President Christine Lagarde said on Sunday’s Buitenhof TV program that it would be a “catastrophic development” for the global economy as a whole if the Americans suddenly can no longer meet their payment obligations. According to her, the ECB is preparing for all kinds of scenarios. but she indicated that she has “confidence in the common sense” of American politicians not to let it come to this.

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