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Wall Street closed with slight losses, but posted its best week since March

Traders work on the floor of the New York Stock Exchange (Reuters/Brendan McDiarmid)

Wall Street’s major indexes erased early gains on Friday as talks about the US debt ceiling stalled, Hopes are dashed that an agreement can be reached soon to avoid a catastrophic stalemate.

although daw Jones decreased by 0.3% Standard & Poor’s 500 A 0.1% f Nasdaq A 0.2 percent, it was Wall Street’s best week since March.

Indicators opened higher amid optimism that a deal to raise the debt limit to $31.4 trillion could be reached by the end of this week. However, the news of the pause Indices fell in a choppy session as Federal Reserve Chairman Jerome Powell spoke on the Monetary Policy Committee.

The general tone of progress made by both sides in the debt ceiling negotiation process was a Tailwind p“The markets have been hit and anything that changes the viewpoint is likely to hurt them,” said Art Hogan of B Riley Wealth in Boston.

This does not mean that it is the end of the negotiation process. It’s just a bump in the road“, he added.

Powell said the fallout from recent banking-sector troubles takes some of the pressure off the Fed to raise interest rates, while a separate report by the Treasury secretary said Janet Yellento bank chief executives on Thursday that more bank mergers may be necessary in the wake of the recent bankruptcies.

US President Joe Biden is flanked by Vice President Kamala Harris and Senate Majority Leader Chuck Schumer (D-NY) as he holds debt-reduction talks with Senate Minority Leader Mitch McConnell (R-Kentucky) and House Speaker Kevin McCarthy (R- California) and congressional leaders in the Oval Office of the White House (Reuters/Evelyn Hochstein)
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Republican leader in the US House of Representatives, Kevin McCarthyOn Friday, it was announced that negotiations to increase the country’s debt limit and avoid default entered into “stop“, between “Real differencesAccording to the White House.

“Yes, we had to take a break,” McCarthy told reporters on Capitol Hill when asked about the status of the negotiations, while the White House indicated shortly before that there were still “real differences” between the two parties to rectify the crisis.

We can’t spend more money next year. The Attorney General, Republican Hafez McCarthy, has been in a conflict with the White House that has been going on for weeks, as the June 1 date approaches, and the United States may enter into an unprecedented halt.

Republicans continue to insist that President Joe Biden must cut public spending if he wants to win their support to raise the country’s debt ceiling, a ceiling that Congress must raise or suspend.

Meanwhile, Democrats maintain that the two cannot be linked and want to increase the ability to issue debt without strings attached.

US Treasury headquarters in Washington (Reuters/Jim Borg).

The pro-government camp is presenting the now stalled talks as an opportunity to discuss the budget. But the White House this Friday acknowledged the difficulties of making progress with their Republican counterparts.

“There are real differences between the two parties on budget issues, and the talks will be difficult,” a White House official said in a statement ahead of McCarthy.

“The president’s team is working hard to find a reasonable bipartisan solution that can be approved by the House and Senate,” he added.

Republicans are calling for public spending cuts
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Biden and McCarthy have held meetings in recent days as a deadline approaches that the Treasury Department says could put the United States between a rock and a hard place.

Republicans demand cuts in public spending and the fiscal deficit, and They want to reduce the debt issuance that would normally make it possible to cover this gap.

Democrats and Republicans do not agree on this increase in the ability to issue debt to the United States, despite the fact that it is necessary for the state to meet its payments to creditors and suppliers and to pay public servants’ salaries and pensions.

Raising the debt issuance limit is usually routine in the country, which has used this congressional-dependent system for decades. But this time, as is the case more than once, the issue became the subject of a political wrestling match.

The United States exceeded the limit for issuing public debt in January, which is $ 31.4 trillion, and since then exceptional measures have been implemented that only allow it to meet its obligations for a period of time.

(With information from Reuters and AFP)

Read on:

What would happen if Democrats and Republicans did not agree to amend the US debt ceiling?
Debt ceiling negotiation: What options does the US Treasury have if it runs out of cash?