Lawmakers Reach Tentative Debt Ceiling Deal

• The S&P 500 rose Tuesday after the Biden administration and Republican lawmakers reached a tentative deal on raising the U.S. debt ceiling.
• President Joe Biden and House Majority Leader Kevin McCarthy reached an agreement to raise the debt ceiling and avoid a default over the weekend, with Congress set to vote on the legislation as early as Wednesday. Lawmakers have not signaled that they intended to return to Capitol Hill early to work on the deal. Both Republican and Democratic support is needed for the bill agreement to pass.
• “Although the upcoming votes in Congress still pose a small risk, the main risk had been that political pressures would prevent a deal from coming together,” wrote Goldman Sachs economists in a note. “Now that a deal has been reached, it seems very likely to pass both chambers of Congress in the coming week.”
• The agreement comes just days before the so-called “X date” on June 5, which is the earliest date the Treasury Department has signalled the U.S. could default on debt obligations. The initial compromise was first announced on Saturday evening.

(Source: CNBC)