Biden confident in breaking debt agreement deadlock, US stocks edge up/Bitcoin breaks through $27,000
President Biden of the United States expressed confidence in reaching an agreement with Congress to raise the debt ceiling. This news has brought optimism to the market, leading to gains in the three major U.S. stock indices and a surge in the price of Bitcoin, breaking through $27,000.
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What Did Biden Say?
The U.S. debt ceiling is a recurring political drama.
The ruling party needs to raise the debt ceiling to keep the country running smoothly, while the opposition party waits until the last minute to compromise, reminding the public how spendthrift the ruling party is. However, both parties know that if there is a default, it will be the voters who suffer. For the sake of votes, everyone has to negotiate obediently.
Biden said that he is confident because the administration is discussing "creating new jobs" and a "large-scale anti-poverty plan" with the Republicans, which are things the Republicans are hoping to achieve. However, the contradiction lies in the fact that the Republicans also want the ruling party to cut spending in the coming years, but apparently the Biden administration disagrees because the U.S. may be heading towards an economic downturn in the near future, and the government needs a budget to create demand and alleviate the recession.
Biden stated:
"I believe we will reach a budget agreement, and the U.S. will not default. We will reach a consensus because this is the only correct path, we must continue to move forward."
In addition to the stock market, U.S. Treasury bond prices have become more stable compared to the past few days.
The yield on the two-year Treasury bond, sensitive to interest rates, rose by 0.08% to 4.15%. The yield on the ten-year Treasury bond increased by 0.03% to 3.58%. An increase in yield means a decrease in price. After reaching the highest point since 2009 at the end of last month, the one-year credit default swap has dropped by 10.6%.