FT News Briefing US expected to hit debt ceiling
Jan 19, 2023
The US is about to hit its debt ceiling, sparking political tensions over managing the $31 trillion limit. Microsoft plans to cut 10,000 jobs in a strategic shift towards future technologies. Meanwhile, the World Economic Forum in Davos highlights growing tensions between the US and Europe over green energy subsidies, with the EU raising concerns about fairness and competition. European companies look for opportunities amidst these dynamics, adjusting their strategies to compete in the rapidly changing U.S. market.
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Debt Ceiling Showdown
- The US debt ceiling limit being reached sets up a political showdown between Democrats and Republicans.
- Republicans demand budget cuts in exchange for raising the limit, causing concern.
Market Implications of Debt Ceiling
- While markets aren't panicking yet, the approaching "X date" when stopgap measures expire could trigger volatility.
- A potential downgrade of US debt by credit rating agencies is also possible.
Microsoft's Strategy
- Microsoft is cutting 10,000 jobs, but CEO Satya Nadella emphasizes their focus on future technologies.
- They will keep hiring and are prepared to invest in emerging platforms, especially AI.