|N.B. Inflation was 1.4% |
when Trump left office
on Jan. 20, 2021
So, here we are, with the presumed expiry date of June 1st fast approaching and no deal has been reached.
The ball is in Joe Biden's court, inasmuch as a majority of the House approved the Republican's bill which raises the debt ceiling (albeit much less than what Biden wanted), with alterations to his budget.
Democrats have not prepared a counter-plan of their own, and neither has President Biden.
So far, Biden has refused to budge on their offer, and talks have now broken down today...with no deal reached...and the President is nowhere in sight, but chose, instead to attend a G7 meeting in Japan.
The following article provides further details on today's failed negotiations and walk-out.
As you can see from the following graphic, the rise of America's Debt Ceiling has become parabolic and cannot be sustained, especially with President Biden's budget proposal to raise it by another $5.8 Trillion this year!
And, with a possible recession looming in the midst of, still, high inflation (in spite of higher interest rates, courtesy of the Fed), and bankruptcies already on the rise (stressing banks), it behoves Biden to justify (to the American public) exploding the debt even higher.
Reckless Federal Reserve monetary policies, as well as the Biden Administration's out-of-control fiscal spending and radical energy policies, have led to high inflation (9.06% in June 2022) and higher U.S. debt.
N.B. Inflation was 1.4% when President Trump left office on January 20, 2021.
Where we go from here is anybody's guess...market players are currently undecided, as well, inasmuch as the SPX is still stuck in its large sideways "Chaos Zone," that I described in my post of March 31, after briefly piercing above its upper edge.
At the moment, price is currently sitting just beneath its channel median, as shown on the following monthly chart.
Failure of the SPX to break and hold above this median and its upper "Chaos Zone," around 4200, could send it back to its lower edge at 3750, or lower to retest 3500, or even 3000.
So, I'll leave you with this little gem...the sum total of Joe's presidency...in his own words...
Seriously, it's no joke! 😕
* UPDATE May 23...
It appears as though President Biden does not take the debt ceiling negotiations seriously and is being seen as negotiating in bad faith...suggesting that there may be some question about the actual default date that has, up to now, been proclaimed as fact by his Treasury Secretary, as described in the following report.
Markets have been fairly subdued and directionless of late, as described above, but just how long investors' patience with this political charade will last is anybody's guess.
The longer this drags on, there is a greater chance we'll see markets drift lower, until they reach a critical velocity that produces a plunge below major support (3750 on the SPX).