Your Evening Briefing: Time Running Out for US Debt Ceiling Fight

The US is another day closer to defaulting on its debt. Despite clear warnings such an event could throw millions out of work, trigger a market selloff and raise borrowing costs, the stalemate triggered by Republicans looking to force concessions from the White House continues with no end in sight. In exchange for paying the nation’s debts, House Speaker Kevin McCarthy is demanding President Joe Biden agree to cuts in future domestic spending. The GOP wants to slash climate programs and education funding while clawing back $65 billion in Covid-19 funds. Biden says he will cut his G-7 meeting trip to Asia to try and rectify the impasse. “Time is running out,” warned Treasury Secretary Janet Yellen, who said that the US would hit its limit June 1.

US consumers remained resilient in April, with retail sales rising in the face of still-high inflation and borrowing costs. The advance in sales suggests low unemployment and steady wage growth are supporting demand. Markets remained squarely focused on the debt ceiling talks in Washington and traded lower for another day. Here’s your markets wrap.