No Default Risk Within the Year
White House Pressures for Confirmed Debt Ceiling Increase, Not Temporary Measures
New York Stock Market Closes Higher for Two Consecutive Days
[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Senate has agreed to temporarily extend the federal government debt ceiling. As a result, an unprecedented U.S. national default will be avoided until December. With the worst crisis averted, the New York stock market closed higher.
According to the political media outlet Politico on the 7th (local time), Senate Majority Leader Chuck Schumer of the Democratic Party announced that he had reached an agreement with the Republicans to raise the U.S. debt ceiling by $480 billion until December 3.
Accordingly, the U.S. debt ceiling will increase from the existing $28.4 trillion to $28.88 trillion.
The Democratic and Republican parties plan to process the agreement in the Senate at 8 p.m. that day.
This agreement was reached after the Republicans proposed a temporary extension of the debt ceiling the day before, which the Democrats accepted.
U.S. Treasury Secretary Janet Yellen warned that if the debt ceiling is not raised or extended by the 18th, the U.S. will face a default situation, repeatedly urging Congress to respond.
Politico stated that although the deadline for the debt ceiling extension is set for December 3, even if no further extension is made by then, it is expected that the Treasury will take longer to face a default. This means that the U.S. Congress has set an additional negotiation deadline until the end of the year.
The White House welcomed the agreement but emphasized that the Republicans must sincerely engage in the debt ceiling negotiations. White House Deputy Press Secretary Karine Jean-Pierre said to reporters on Air Force One that "(the debt ceiling negotiations) should not become a political game," adding, "We will not give up efforts to raise the debt ceiling."
Following the news of the debt ceiling extension agreement, the New York stock market showed strength that day. The Dow Jones Industrial Average rose 0.9%, the S&P 500 increased 0.8%, and the Nasdaq Composite gained 1%.
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