U.S. debt relief talks to resume on May 22

Debt-limit talks between President Joe Biden and Speaker of the House Kevin McCarthy will begin today in Washington, according to Bloomberg.

Returning from the G7 summit in Japan, President Biden had a telephone conversation with the Speaker of the House of Representatives. He noted that the conversation went well, but there is little time left to prevent a US default.

Earlier, McCarthy stressed the lack of an agreement between the parties, and a default could occur as early as June 1. He emphasized the importance of time, but expressed more hope for a deal to be reached after talking with Biden about resolving differences.

In this regard, the US market may face more volatility this week, while Asian stocks are rising and European ones are showing declines. Investors also hope that the Federal Reserve will pause in raising interest rates due to the risk of default.

Treasury Secretary Janet Yellen said on Sunday that the chances of all U.S. bills being paid by mid-June are rather low.

Republicans have lowered their demands for a 6-year spending cap from 10, but they continue to push for a massive increase in defense spending next year, which could lead to even more cuts to social services. Defense currently accounts for about half of all federal discretionary spending.