Your Weekend Reading: US Default Risks ‘Catastrophic’ Global Jolt

While more signs point to the US economy slowing and the Federal Reserve making progress in its inflation fight, Washington could soon destroy all that while jolting the global economy in unprecedented fashion. US President Joe Biden is expected to meet next week with Republican leaders who have been demanding unrelated cuts to spending as their price for letting America pay its bills. A growing chorus is warning that the fallout from a default could lead to a deep recession, a spike in unemployment and borrowing rates, a blow to national security and other grim ripple effects. With US government cash set to run out in the coming weeks, Treasury Secretary Janet Yellen repeated that the only good outcome is for Congress to raise the country’s $31.4 trillion borrowing limit—though she hasn’t said what measures she would take if that doesn’t happen. The International Monetary Fund warned of “very serious repercussions” for the global economy, while JPMorgan Chief Executive Officer Jamie Dimon, who says his bank is convening a war room to prep for the self-inflicted disaster, took a jab at Donald Trump for encouraging the GOP to dig in over raising the debt limit even if it means crashing the economy. “It’s one more thing he doesn’t know very much about,” Dimon says. “Anyone who’s anyone knows that is potentially catastrophic.”

It’s been an eventful week for 2024 GOP presidential candidates. A federal jury in New York found Trump liable for sexually assaulting writer E. Jean Carroll and then defaming her. Ron DeSantis failed to get a donation from Blackstone co-founder and GOP megadonor Steve Schwarzman, who left a meeting with the Florida governor unconvinced of his White House prospects. Still, DeSantis—who has driven Florida to the far right with restrictions on abortion, voting access, LGBTQ rights and education—is selling himself to voters as the drama-free alternative.