Forex Analysis & Reviews: 08.05.2023 - Fight over the debt ceiling...

08.05.2023 06:59 PM

Fight over the debt ceiling begins

Joe Biden and Kevin McCarthy have approached a decisive moment in their fight over the debt ceiling. The President is set to receive the House Speaker and other Congressional leaders at the White House on Tuesday, and during which McCarthy is likely to seek spending cuts as a condition for suspending or raising the debt limit. Biden, meanwhile, will most certainly insist on separating the issues and calls for an increase in the debt limit.

The stakes are higher than just politics as a default would trigger a market sell-off, as well as could cost millions of jobs. In fact, Treasury bill markets already showed new concerns about the possibility of the US defaulting on its debt in early June. However, expectations for the meeting are low.

Biden said he plans to keep his promise not to negotiate over the debt ceiling, arguing that it would create a dangerous precedent that allows Republicans to hold the country's economy hostage compared to their preferred political outcomes.

The dollar index once again approached the psychological level of 100:

McCarthy asserts that there is no alternative, and his position strengthened over the weekend, when 43 Senate Republicans, including minority leader Mitch McConnell, signed a letter stating that they would not support a clean debt ceiling increase. That is enough to prevent Democrats from overcoming a filibuster if they propose one without any conditions attached.

The situation on Pennsylvania Avenue has also prompted a new consideration of executive actions, such as Biden's reference to the 14th Amendment, which states that the validity of the country's public debt should not be questioned. But when asked in an interview last Friday, the President said he "hasn't gotten there yet."

US Treasury Secretary Janet Yellen warned that such a maneuver could trigger a "constitutional crisis" and do little to prevent unnecessary economic damage. Economic experts also said that it could not only lead to the court overturning the initiative and plunging the country into an immediate financial crisis, but also scare off investors and raise borrowing costs for the government.

"We will have an economic and financial disaster of our own making if we don't take any actions that President Biden and the US Treasury Department can take to prevent this," Yellen said.

你今天已经点赞上这篇文章了

*这里的市场分析是为了增加您对市场的了解，而不是给出交易的指示。

If you have any content questions, please contact editorial-board@instaforex.com

Fundamental analysis

Andrey Shevchenko,
Analytical expert of InstaForex
© 2007-2025

该作者的更多文章

电子邮件订阅

EURUSD

Euro vs US Dollar

选择时间框架

分钟

小时

天

周

开始交易

通过InstaForex赚取加密货币汇率变动的收益。

下载MetaTrader 4并开启您的第一笔交易。

推荐文章

比特幣面臨拋售壓力

市場包裝苦藥

歐洲央行將面臨越來越多的挑戰

整個六月份，市場的波動將如特朗普總統任期早期月份般激烈（在此期間，黃金價格可能會持續上升，而美元/日元可能會下跌）

6月2日需要關注什麼？初學者的基本事件解析

GBP/USD 概況 – 6月2日：唐納·川普再度帶來驚喜

歐元/美元概況 – 6月2日：美國的馬戲團加速發展

EUR/USD。六月你好：ISM指數、歐元區通膨、歐洲央行會議及五月非農就業報告

美元：本週展望

英鎊：週度預覽

Top analytics