The U.S. economy gets a fighting chance as the debt ceiling may bear fruit soon as Speaker McCarthy and President Biden are set to reach common ground next week to save the country from an imminent debt default. 

Speaker McCarthy to work over the weekend as U.S. economy debt ceiling talks set to continue next week

The U.S. House of Representatives speaker McCarthy is set to recheck his ultimatums and demands over the weekend as the urgent talks to raise the U.S. debt ceiling have only seven days before the nation faces an imminent threat of debt default, which could be the first-ever event.

The negotiators appeared to move closer to a deal on Thursday, but the coming week has been flagged as the most crucial and delicate part of the talk for both sides. Onlookers have advised that both sides of discussions must keep the best interests of the U.S. economy in heart as a debt default would be catastrophic to citizens and the same spending rate would also be unsustainable

“We’re at a sensitive phase, with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing,” Republican negotiator Rep. Patrick McHenry of North Carolina told reporters at the Capitol on Thursday. “Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.”

At the White House, President Biden seems cautiously optimistic about the situation, saying:

“The only way to move forward is with a bipartisan agreement, and I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country by resuscitating the U.S economy.”

A sense of urgency clouded Thursday’s talks after Fitch warned that a debt default by the U.S. would be catastrophic to its credit ratings. On Wednesday, Fitch said it would place the U.S. triple-A status on “rating watch negative.”

It also added that if Congress did not reach an agreement before the Treasury’s June 1 deadline to raise or suspend the debt limit, it would have no other choice but downgrade the country’s credit rating. Speaker McCarthy’s critics have also not been silent about the matter, as 35 of the most vocal ones in the House GOP released a letter urging him to abandon the current talks and issue more befitting demands.

These critics want the speaker to take advantage of the ongoing talks and secure more concessions from the White House, including an immigration bill and discrediting of Treasury leaders, particularly Secretary Janet Yellen.

U.S. and China top commerce officials meet for trade discussions

The U.S.Commerce department has had discussions with China over trade concerns due to the recent spate of actions taken against the U.S. companies operating in China. The Secretary of Commerce, Gina Raimondo, held a meeting with her Chinese counterpart Wang Wentao in Washing D.C. on Thursday to deliberate on matters surrounding the two nations’ bilateral trade.

The two leaders’ meeting marks the first time the Commerce executives met at a cabinet-level exchange between the two countries in months. An after report by the Commerce Department states that they had substantive discussions on their cooperation and areas of opportunities and potential collaboration.

 “The two had candid and substantive discussions on issues relating to the U.S.-China commercial relationship, including the overall environment in both countries for trade and investment and areas for potential cooperation.”

Raimondo also “raised concerns about the recent spate of PRC [People’s Republic of China] actions taken against U.S. companies operating in the PRC,” the report said.

The bilateral exchange comes when nations observe how the U.S. economy will overcome its crisis and handle international bipartisan control as its relations with some world powers like China continue to sour. 

The Asian nation has joined with others to build the BRICS trading block that is now fast-tracking the release of a new payment system and currency that will reduce dependence on the U.S. dollar. The Group of Seven takes that step with seriousness as they want to do away with Chinese supply chains.

This Group of Seven leaders met Hiroshima over the weekend, vowing to “de-risk and diversify” from Chinese reliance. They are claiming that Beijing’s practices are fond of distorting the global economy.”

The BRICS nations have been working around the clock to de-couple from the already straining US dollar. 25 more countries are seeking to join hands with them in similar interests, which put the U.S. economy on the loose ground as the world’s reserve currency.

However, only time will tell how the U.S. debt talks will go, their effects on the U.s. economy, and the pull away from an already more resilient Chinese economy will go. Keep watching Fintech Express for updates on world economics and other related stories.