US Default: End of Drama?


The Senate, as expected, approved a bill on the ceiling of the US national debt, now it will go to President Biden's signature. The decision will set the course for federal spending for the next two years and suspend the debt ceiling until January 1, 2025, by which time a new episode of the US default drama series can be expected. Bloomberg estimates that US federal debt is on track to grow from 97% of GDP in 2022 to over 130% of GDP by 2033.

According to Reuters, BlackRock CEO Larry Fink believes that the protracted debate over the national debt ceiling has threatened the status of the dollar as the world's reserve currency. In the long term, this needs to be corrected and trust restored.

Meanwhile, stock index charts show that the market is dominated by positivity. Both the E-mini S&P 500 and the E-mini NASDAQ 100 are at yearly highs, buoyed by the AI hype. Dow Jones demonstrates lagging dynamics behind them.

Other drivers are becoming relevant for financial market participants — today at 15:00 GMT+3 official data on the US labor market for May will be released. It will be important in terms of assessing the likelihood of a recession. If the labor market does not disappoint, US economic growth should remain robust, or at least manageable – this is called a “soft landing.” But the fall in employment will be a harbinger of a recession.

Get ready for bursts of volatility today.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON The US Continues to Trump the Euro Economy on Key Metrics, But What Is Next? Is the UK really in a recession? Perhaps 2024 data will be different Weekly Market Wrap With Gary Thomson: US INFLATION, GBP/USD, GOLD, BITCOIN EURGBP continues to be suppressed during February. Will it rise again?

Latest articles


NASDAQ Rally Shows Tech Stocks Are Back in Focus - But for How Long?

The NASDAQ index, well known as a premier listing venue for North American technology companies across the entire spectrum from the Silicon Valley giants to recently listed newcomers, has been going from strength to strength during the beginning part of

Forex Analysis

The Market Focusing on Speech of Federal Reserve Head

Despite the abundance of fundamental data of the past trading week, the main currency pairs continue to trade in rather narrow flat corridors. Thus, the US dollar/yen currency pair is trading above 150.00, from time to time testing

Forex Analysis

Swiss Franc Weakens after Inflation News

Inflation in the country fell in February to its lowest level in nearly two-and-a-half years, data from Switzerland's Federal Statistical Office showed on Monday. Although consumer prices rose 1.2% compared to a year earlier, there is reason to believe

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.