Your Evening Briefing: The Fed Is Worried About GOP Brinkmanship

Not a surprise but at least it’s on paper. Minutes of a recent meeting of US Federal Reserve officials show they foresee further rate hikes, with most—but not all—supporting a slower pace. What the Fed seems most worried about these days is less the vicissitudes of inflation and more the ticking time bomb of Congressional brinksmanship. Policymakers appear increasingly concerned about the potential for prolonged partisan warfare over the debt limit to disrupt the economy and financial markets. As the new Republican-controlled House of Representatives tries to muscle Joe Biden into spending concessions (the president in his State of the Union address called out now-walked back GOP proposals to sunset Social Security and Medicare), the Treasury Department is already applying special accounting measures to make payments. But time is slowly running out, and the central bank is getting a little nervous. Here’s your markets wrap.

Apollo Global Management is said to be in talks to inject $750 million to support the leveraged-finance business of Credit Suisse Group’s investment-banking spinoff, First Boston. Apollo’s commitment may be matched by the Zurich-based lender, giving the unit roughly $1.5 billion in capital.