17 Oct 2013
US Senate approves deal to raise debt limit, fund government
FXstreet.com (Barcelona) - The US Senate has finally approved a temporary deal to raise the debt limit and government funding, which will see a reopen of the government through Jan 15, while a debt ceiling extension through February 15. Now the bill will go to the House, where it is expected to pass and be signed off by US President Barack Obama.
What this deal means is that the Treasury will be able to borrow through February 7, with ‘emergency flexibility’ to avoid default for a short period of time after then. Since the deal funds the government through to January 15, government employees will go back to their jobs, recovering the full salary.
In a note to clients published by Citi, Economists expect the ‘emergency flexibility’ measures to be worth around $200 billion, making the ‘hard’ limit trhough to March 2014.
On the budget negotiations, a deal will try to be reached by mid-December. Lastly, on Obama's health bill and sequester, no significant change will be observed, which means a political defeat by the Republicans.
“The compromise we reached will provide our economy with the stability it desperately needs,” said Senate Majority LeaderHarry Reid, cited by Bloomberg. Meanwhile, Mitch McConnell, the Senate minority leader, said “This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought."
What this deal means is that the Treasury will be able to borrow through February 7, with ‘emergency flexibility’ to avoid default for a short period of time after then. Since the deal funds the government through to January 15, government employees will go back to their jobs, recovering the full salary.
In a note to clients published by Citi, Economists expect the ‘emergency flexibility’ measures to be worth around $200 billion, making the ‘hard’ limit trhough to March 2014.
On the budget negotiations, a deal will try to be reached by mid-December. Lastly, on Obama's health bill and sequester, no significant change will be observed, which means a political defeat by the Republicans.
“The compromise we reached will provide our economy with the stability it desperately needs,” said Senate Majority LeaderHarry Reid, cited by Bloomberg. Meanwhile, Mitch McConnell, the Senate minority leader, said “This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought."