The US refers to the bulls not to be happy too early! The U.S. House of Representatives approved an increase in the debt ceiling, but risk-dependent

The U.S. House of Representatives approved a bill on Tuesday to raise the government's debt ceiling short-term, and submit the bill to President Biden for signature a few days before the Treasury Department may exhaust its borrowing power. Next, the two parties in the United States will have a game on the infrastructure plan and the social transformation plan. How to resolve the debt ceiling after December 3 is unknown. The risks of the US government shutdown and debt default still exist.

The U.S. House of Representatives approved an increase in the debt ceiling, waiting for Biden's signature

It is reported that the U.S. House of Representatives avoided the threat of an immediate financial disaster with a vote of 219-206, but opened the door for party resistance over debt and expenditure issues again in less than two months.

Biden is expected to quickly sign a bill to increase the Treasury Department’s statutory debt ceiling by US$480 billion so that it can fulfill the federal government’s payment responsibilities until December 3.

The current US Treasury debt is 28.4 trillion U.S. dollars and will be allowed to increase to approximately 28.8 trillion U.S. dollars.

U.S. Treasury Secretary Yellen warned that although the president is widely expected to sign the bill, failure to sign the bill will lead to economic disaster before October 18. Earlier in October, Yellen warned in an interview that if the government is unable to repay the debt and trigger an unprecedented default, she will "fully anticipate" the US economic recession.

The suspension or extension of the debt ceiling does not authorize new government spending, but instead allows the Treasury Department to pay for appropriations that Congress has already approved.

Pelosi said that the size of Biden’s economic agenda will shrink and the focus will be on “doing less but doing well”

Democrats caught in the divide are working to figure out how to incorporate their priorities into the reduced tax and spending bill. The Speaker of the House of Representatives Pelosi hinted that President Biden’s trillion-dollar economic agenda would shrink and focus on fewer but well-executed projects.

Pelosi said at a press conference on Tuesday: "We will make some important decisions in the next few days so that we can move on. If we can spend less money, we need to make a choice."

The Democrats must reduce the size of the at least $3.5 trillion bill drafted by the House of Representatives committee last month to about $2 trillion-Biden has proposed this number as a progressive party in the party pushing for increased spending and a moderate Democrat in West Virginia. A potential compromise between Congressman Joe Manchin, who said he supports a bill close to $1.5 trillion.

Pelosi said she was "very disappointed" with spending levels below 3.5 trillion U.S. dollars. She also said: "We are still talking about trillions of dollars, but the amount is much less."

In a letter to Democrats in the House of Representatives on Monday evening, Pelosi stated that the emerging consensus is “do less but do well so that we can still have a transformative impact on the family in the workplace and be responsible. To solve the climate crisis."

If the United States defaults on debt, it will have a huge impact on the global financial market based on the security of US Treasury bonds. The government's daily payments to social security beneficiaries, disabled veterans, and active military personnel will also be questioned. Raising the debt ceiling in the United States means that it will not default on its debt, which means that the credit of the U.S. dollar will not collapse.

However, market analyst Associated Press has written an article warning that the House of Representatives asking Biden to raise the debt ceiling to avoid default is only temporary. He believes that the fierce partisan struggle is expected to restart before the December deadline, and there may be chaos at the end of President Biden's first year in power.

Although the US House of Representatives approved an increase in the short-term debt ceiling, it temporarily avoided debt default. However, how the U.S. two parties will play a game on the US$1.2 trillion infrastructure plan and the US$3.5 trillion social transformation plan. How to resolve the debt ceiling after December 3 is unknown. The US government shuts down and debts. The risk of default still exists, and the dollar bulls still need to be vigilant.



Daily chart of the dollar index

GMT+8 At 8:45 on October 13, the US dollar index was at 94.45.