Markets should ‘feel better’ by progress in debt limit talks – McCarthy

Some optimism is being seen over in Washington as House Speaker Kevin McCarthy said he had a “very good discussion” with President Biden about government spending and the debt ceiling.

“We have different perspectives, but we both laid out some of our vision of where we’d want to get to. And I believe, after laying them both out, I can see where we can find common ground,” McCarthy told reporters. “I would feel better if I was the markets based upon the meeting I had today.”

Extraordinary measures are already being employed by the Treasury, with Secretary Janet Yellen warning of big consequences for the U.S. economy if the debt limit is not resolved (which has prompted talk about a $1T coin solution). SA contributor James Baker sheds more light on how the situation could impact stock, bond, gold, silver, and U.S. dollar markets, while highlighting the differing consequences of past debt ceiling crises.

President Biden is also weighing new candidates for his top economic team, with reports suggesting that Fed Vice Chair Lael Brainard and longtime confidant Jared Bernstein could lead the National Economic Council and Council of Economic Advisers.