FT News Briefing What did the fight over the US debt ceiling cost?
Jun 2, 2023
A major cryptocurrency exchange, Binance, is grappling with regulatory challenges, resulting in a significant loss of market share. Meanwhile, U.S. political leaders are racing to finalize a deal on the debt ceiling to avert a financial crisis, showcasing surprising bipartisanship amidst intense polarization. In Europe, inflation rates have unexpectedly dropped to their lowest since the onset of the Ukraine conflict. Additionally, Ukraine's innovative military tactics are placing pressure on Russian defenses, hinting at shifting dynamics in the ongoing conflict.
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Debt Ceiling Deal's Significance
- The deal to raise the U.S. debt ceiling is significant for global investors and the world economy.
- It demonstrates House Speaker Kevin McCarthy's ability to navigate a controversial bill through the House.
Political Polarization and the Debt Ceiling
- The fight over the debt ceiling reveals high political tension, bringing the U.S. to the brink of default.
- Despite this, the center held in American politics, as a deal was reached to avert potential fallout.
Impact on U.S. Economic Reputation
- The debt ceiling crisis caused less damage than in 2011, avoiding a market crash and credit downgrade.
- However, repeated crises could harm the U.S.'s financial reputation and the dollar's status as a reserve currency.