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Debt celing negotiations to resume on Monday
Federal leaders are expected to continue with negotiations on the U.S. debt ceiling on Monday as the country approaches a potential default.
President Joe Biden and House Speaker Kevin McCarthy, R-Calif., are scheduled to meet in person at the White House.
Treasury Secretary Janet Yellen said Sunday that “hard choices” will need to be made about which bills will go unpaid if the debt ceiling is not raised and reaffirmed her warning that the United States could default on its debt as early as June 1,
— Jesse Pound, Ashley Capoot
Powell says rates may not have to rise as much as expected
Federal Reserve Chair Jerome Powell said Friday that interest rates may not have to rise as much as previously thought in part due to stresses seen in the banking sector.
“The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” he said as part of a panel on monetary policy.
“So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals,” he added. “Of course, the extent of that is highly uncertain.”
— Jeff Cox
Fed’s Williams says ‘era of very low’ interest rates remains intact
New York Federal Reserve President John Williams said the longer-term trend in interest rates is likely lower, despite the recent increases in an attempt to battle inflation.
In a largely academic discussion during a forum in Washington, D.C., Williams said the “natural” rate of interest remains to the downside as the prospects for economic output are muted. That’s despite the pandemic-era surge in inflation and the increases in the interest rates to combat the higher prices.
“Importantly, there is no evidence that the era of very low natural rates of interest has ended,” Williams said.
—Jeff Cox
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