Debt-ceiling deal: What is it and what does it mean for the US?
Just days before the US could start to run out of money, a tentative deal was reached by President Joe Biden and GOP HouseSpeaker KevinMcCarthy toraisetheUSdebtceilingandpreventapotentially catastrophicdefault.
The tentative agreement to raise the government’s current $31.4 trillion borrowing limit was reached over the weekend after several weeks of tense negotiations—butthedramaisfarfromover.
Biden and the Republican speaker now have to urgelawmakersfromtheirrespectivepartiestovote for the deal in order to avert a prospective June 5 defaultthatcouldsparkglobalfinancialchaos.
If approved, the deal — slated to bevoted onby the House and Senate by next week — would allow the federalgovernmenttoborrowmoneytopayitsbills until2025.
The deal came together after Treasury Secretary Janet Yellen told Congress last week that the US could no longer keep within the limit and could defaultonitsdebtobligationsbyJune5.
Souce:
https://nypost.com/2023/05/29/debt-ceiling-deal-what-is-it-and-what-does-itmean-for-the-us/
Companies push prices higher, protecting profits but adding to inflation
The prices of oil, transportation, food ingredients and other raw materials have fallen in recent months as the shocks stemming from the pandemicandthewarinUkraine havefaded.Yet, many big businesses have continued raising pricesatarapidclip.
Some of the world’s biggest companies have said they do not plan to change course and will continue increasing prices or keep them at elevatedlevelsfortheforeseeablefuture.
As a result, some economists warn, policymakers attheFederalReservemayfeelcompelledtokeep raising interest rates, or at least not lower them, increasing the likelihood and severity of an economicdownturn.
“Companiesarenotjustmaintainingmargins,not justpassingoncostincreases,theyhaveuseditas a cover to expand margins,” Albert Edwards, a global strategist at Société Générale, said, referring to profit margins, a measure of how muchbusinessesearnfromeverydollarofsales.
FDIC: US bank deposits dropped by most in 39 years to start 2023
US banks lost $472 billion in deposits in the first quarter, according to a new quarterly report from the Federal Deposit Insurance Corporation (FDIC) that offers a comprehensive look at how the industry navigated its most challenging period sincethe2008financial crisis.
The deposit decline was the largest since the FDIC begancollectingquarterlyindustrydatain1984and marked the fourth consecutive quarter of industry outflows.Theregulatortracksperformancefor4,672 commercialbanksandsavingsinstitutions.
The drop in deposits, which amounted to 2.5%, was largely due to movement by uninsured depositors who were above the $250,000-per-account level backstopped by the FDIC. They pulled $663 billion, while insured deposits actually increased by $255 billion.
TheFDICreportcoversatumultuousperiodmarked by an aggressive rise in interest rates and the failuresofthreebanksinamatterofdays,including SiliconValleyBankandSignatureBankonMarch10 andMarch12.
Souce:
https://finance.yahoo.com/news/fdic-us-bank-deposits-dropped-by-most-in-39years-to-start-2023-144427156.html
US announces $46 million in funds to eight nuclear fusion companies
Eight US companies developing nuclear fusion energywillreceive$46millionintaxpayerfunding to pursue pilot plants attempting to generate power from the process that fuels the sun and stars,theDepartmentofEnergysaid.
Generating more energy from fusion reaction than goes into it has eluded scientist for decades. But more than 30 companies around the world are trying to generate power from fusion, which could one day help the world slash emissions linkedtoclimatechange,withoutproducinglonglastingradioactivewaste.
Fusion occurs when the nuclei of two light atoms such as hydrogen heated to extreme temperatures, fuse into one heavier nucleus releasingvastamounts ofenergy.
TheEnergyDepartment’sMilestone-BasedFusion Development Program hopes to help develop pilot-scale demonstration of fusion within a decade.
https://timesofindia.indiatimes.com/world/us/us-announces-46-million-in-fundsto-eight-nuclear-fusion-companies/articleshow/100659223.cms?from=mdr
Consumers are more likely to cut back on restaurant visits than trade down to fight inflation, report says
During the Great Recession, consumers hunted for bargains, trading down to cheaper restaurants or pickingthe leastexpensivemenuoptions.
But today, as inflation puts pressure on their wallets, consumers are more likely to cut back on their restaurantvisits insteadtopreservetheirbudgets,accordingtoa reportfromAlixPartners.
Thecostofeatingouthasbeenrisingformorethanayear.InMarch,forthefirsttimesinceinflationbegan acceleratinginmid-2021,pricesformealseaten awayfromhomerosefasterthanpricesatgrocerystores.
InApril, prices for food away fromhomerose8.6% comparedwith the year-earlier period, according to the BureauofLaborStatistics. Pricesforfoodathomeclimbed7.1%during thesameperiod.
Inresponse,dinershavebeenvisitingrestaurantslessfrequently.InApril,trafficatrestaurantsopenatleast ayearfell3.5%comparedwithayearearlier,accordingtoBlackBoxIntelligencedata.
Souce:
https://www.cnbc.com/2023/06/02/consumers-more-likely-to-cut-back-on-restaurant-visits-than-trade-down.html