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Debt-Limit deal passes House with broad bipartisan support
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Debt-Limit deal wins house passage, easing U.S. default concerns. The deal now heads to the Senate, where approval is virtually certain, and Show More
Debt-Limit deal wins house passage, easing U.S. default concerns. The deal now heads to the Senate, where approval is virtually certain, and the only question is timing. The debt-limit legislation would restrict government spending through the 2024 election and avert a destabilizing U.S. default. Defense spending would get the 3.3% increase the president proposed for the coming year. Now investors are shifting attention to other uncertainties more likely to influence growth, such as another possible Federal Reserve interest-rate increase.

What's in the US debt ceiling deal?
•Suspending the debt ceiling until Jan. 1, 2025
•Caps on spending, but not defence
•Unspent Covid funds returned
•Welfare tinkered with, but no overhaul
•Funds to enforce tax rules on wealthy Americans
•Easier to get energy project permits

How does the debt ceiling issue affect the market if the government can't make a deal with it?
•short-term U.S. bond rates are likely to climb before the debt ceiling pass, and long-term U.S. bond rates tend to fall.
•If the government default or the uncertainty surrounding it could cause investors to sell U.S. treasury bonds and thus weaken the dollar and increase borrowing costs for businesses and homeowners alike.
•Stock and bond volatility will amplify before and after the debt ceiling issue pass from Congress.

Q:
1. What's your biggest concern about the U.S. debt ceiling?
2. What's your investment strategy?
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