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What is the U.S. debt ceiling and why it’s important

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The United States’ national debt is set to default on Thursday.

In a letter sent to lawmakers, U.S. Treasury Secretary Janet Yellen warned that the U.S. is expected to hit its $31.4 trillion debt limit this week.

Congress is working on the issue, but it remains to be seen if lawmakers on Capitol Hill will actually raise the debt ceiling.

The debt ceiling is the amount of money the U.S. is allowed to borrow to pay for its vast commitments.

Basically, in the U.S., the debt ceiling or debt limit is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury.

This limits how much money the federal government can pay on the debt they already borrowed.

Currently, the U.S. government borrows large sums of money in order to cover all of its expenses. However, decades ago, Congress created the debt ceiling in an effort to avoid having to approve each new debt individually.

Since then, lawmakers have raised the debt ceiling dozens of times. When this happens—Congress allows the government to take on enough debt to settle the spending obligations it has already made.

If Congress is unable to raise the debt limit in time, the U.S. can only use incoming cash to pay its current commitments which in effect would create a large deficiency.

This is the first debt limit fight since Republicans took control of the House. So far, House Speaker Rep. Kevin McCarthy has signalled that he might leverage the negotiations in order to secure deep spending cuts.

But President Joe Biden and a Senate controlled by Democrats strongly oppose spending cuts.

Veronica Dudo is the U.S. Correspondent for Ticker News covering America’s biggest headlines. As an Emmy® Award nominated global journalist, Veronica has traveled across the country and around the world reporting on historical events that connect all citizens. Lauded as an award-winning international journalist, Veronica has executed stellar news coverage for NBC News, CBS News, The Hill, ME-TV Network and AOL. Her stories have highlighted a plethora of topics ranging from breaking news and politics to economic affairs across the USA, European Union, and Asia; cultural affairs; globalization; governance; education; and sustainability.

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Powell warns against further December interest rate cuts

Powell warns against assumptions of further rate cuts, highlighting divisions within the Fed amid ongoing economic uncertainties

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Powell warns against assumptions of further rate cuts, highlighting divisions within the Fed amid ongoing economic uncertainties

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In Short:
– Jerome Powell stated further interest rate cuts are uncertain after recent decreases, aiming to manage market expectations.
– The Fed ended its balance sheet reduction due to lending market disruptions and mixed views on future rate cuts among officials.

Federal Reserve chairman Jerome Powell indicated that further interest rate cuts are not guaranteed following the recent decrease. In a press conference, he stated that a further reduction in December is “far from” certain. His comments aimed to temper market expectations, where the likelihood of another cut was previously estimated at over 90 per cent.In response to Powell’s remarks, yields on the two-year treasury rose, and traders adjusted their expectations, now estimating a 60 per cent chance of a December reduction. Recently, the Federal Open Market Committee voted 10-2 to lower the federal funds rate target range to 3.75-4 per cent, in response to concerns about the labour market.

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The Fed has also announced an end to its balance sheet reduction efforts due to disruptions in short-term lending markets. Since 2022, the bank has reduced its asset holdings by over $US2 trillion following aggressive purchases aimed at stabilising the economy after the pandemic.

Policy Divisions

Recent post-meeting statements highlighted mixed views among Fed officials about the pace of future rate cuts. Powell remarked that uncertainty surrounding economic conditions necessitates a cautious approach. Ongoing government shutdowns have limited policymakers’ access to crucial economic data, complicating decision-making.

Recent labour market developments show slowed job gains, raising concerns about employment. The Fed is also cautious about reducing rates too quickly due to inflation remaining above their 2 per cent target, reflecting a complex economic landscape. Policymakers have struggled with decisions amid data limitations from the government shutdown, impacting their assessments of inflation and economic indicators.


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Trump finalises trade deal with South Korea at summit

Trump and South Korea finalise trade deal as he prepares for vital summit with Xi Jinping in Busan

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Trump and South Korea finalise trade deal as he prepares for vital summit with Xi Jinping in Busan

<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/GB4FDyAt_a4?si=lN5bO3Upkyr75zAa” title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” referrerpolicy=”strict-origin-when-cross-origin” allowfullscreen></iframe>
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In Short:
– Trump and South Korea’s Lee finalised a trade deal requiring $350 billion in U.S. investments.
– Trump anticipates favourable talks with China to reduce tariffs and improve relations.

Donald Trump and South Korean President Lee Jae Myung finalised a contentious trade deal at a summit in South Korea on Wednesday. The U.S. President expressed optimism about an upcoming summit with China’s Xi Jinping.The agreement, unveiled in late July, stipulated that South Korea would make $350 billion in new investments in the U.S. to avoid significant tariffs on imports. However, negotiations on the investment structure had stalled.

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Trump and Lee reached a compromise allowing Seoul to divide its $350 billion investment into $200 billion in cash, paid in $20 billion instalments. The remaining $150 billion will be allocated to shipbuilding investments.

Upon arrival from Tokyo, following a North Korea missile test, President Trump received an extravagant welcome in the historic city of Gyeongju, the venue for this year’s Asia-Pacific Economic Cooperation forum.

His discussions with Xi are scheduled for Thursday in Busan. Trump downplayed the North Korea missile test and focused on his meeting with Xi, the leader of the world’s second-largest economy.

“I think we’re going to have a very good outcome for our country and for the world,” Trump stated. He anticipates reducing U.S. tariffs on Chinese imports in exchange for China agreeing to control the export of fentanyl precursor chemicals. The Wall Street Journal reported that tariffs could be halved from the current 20%.

China’s foreign ministry indicated that the upcoming meeting would foster positive developments in U.S.-China relations.

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December rate cut all but locked in

Australia’s economy struggles; rate cut impending but signals deeper issues, not recovery. #RBA #InterestRates #FinanceNews

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Australia’s economy struggles; rate cut impending but signals deeper issues, not recovery. #RBA #InterestRates #FinanceNews


Australia’s economy is losing steam, with weak consumer confidence, falling job ads, and a struggling construction sector, a December rate cut now seems inevitable. But it won’t be a win, it’ll be a warning.

#RBA #InterestRates #AustraliaEconomy #Inflation #Growth #Recession #FinanceNews #CPI #Economy #RateCut


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