• Speaker McCarthy warns of financial crisis if US debt limit not raised by June 1st
• President Biden and McCarthy agree to appoint senior members to negotiate a deal
• Speaker McCarthy believes a default won’t happen and both sides will come to an agreement
Fears of US Debt Default
House of Representatives Speaker Kevin McCarthy has warned that the United States risks a potential financial crisis if it fails to raise its debt ceiling by June 1st. This comes as President Joe Biden and Speaker McCarthy have agreed to appoint senior members from their respective teams to hammer out a deal.
In an interview with CNBC, McCarthy criticized the president for not negotiating sooner, saying “I’ve been on your show many times telling you we should be nervous because the president’s not negotiating”. He added that “The Republicans passed our bill in April, long before [Treasury] Secretary [Janet] Yellen told us the deadline was June 1. I never wanted to be working towards a deadline.”
President Biden addressed the nation this morning, saying that he believes an agreement is imminent and that he and McCarthy have appointed senior members of their teams to hammer out a deal. He added “I proposed a budget that will reduce another $3 trillion over the next decade. That includes more revenue by asking the wealthy and large corporations to begin to pay their fair share and cutting subsidies that exist in the law now to Big Oil and Big Pharma”.
Analysis from Bloomberg
Bloomberg commodity strategist Mike McGlone predicts a financial crisis if no agreement is reached between Biden and McCarthy, with risk assets like Bitcoin (BTC) expected to fare worst in such an event.
McCarthy’s Final Thoughts
McCarthy concluded his statement with confidence, saying “I think at the end of the day, we do not have a debt default. I think we finally got the president to agree to negotiate”, expressing optimism for both sides coming together for an agreement before June 1st.