Biden | Weekly Excerpt June 5

Market and unemployment data

The S&P 500 rallied on Friday as debt ceiling increase legislation cleared the final hurdle, putting the U.S. on track to avoid default, just a simple signature from President Biden. The strong jobs report further encouraged bullish market bets.

Although the unemployment rate rose more than expected to 3.7% and wage growth accelerated less than expected, the U.S. economy added 339,000 new jobs in May, far exceeding the 180,000 forecast. Following the better-than-expected May job growth, Morgan Stanley stated that. "continue to see the Fed on hold at the June meeting and think the bar will be too high for the Fed to resume hiking."

Debt ceiling

On Capitol Hill, the Senate passed a bill to raise the debt ceiling and reduce spending, clearing one last crucial legislative hurdle. The bill now heads to President Biden's desk for his signature, avoiding an unprecedented default.

Before a bill can be signed by the president after it has been approved by both houses of Congress, it must first go through the formal enrollment process. As soon as he receives the bill, Biden has promised to sign it. Both houses of Congress are composed of Republicans and Democrats. It is common knowledge the political difference that exists between these two parties, placing them at opposite extremes when it comes to political ideals. Taking this into consideration, the major disagreement regarding the debt was the lack of support Republicans gave to the idea of raising the debt ceiling, arguing that it was not sustainable to continue to increase the debt without any additional cuts. 

As a result of Republican dissatisfaction with the Democratic proposal to simply raise the debt ceiling without making additional cuts, Republicans chose to suggest which sectors and projects would be viable for cuts as a long-term solution. Some projects proposed for cuts were specifically the "Biden's Student Loan Forgiveness Plan".the "Pandemic Relief Spending". and the "Biden's Signature Climate Legislation".. However, the main objection to the funding cut was the large amount of unemployment that this action would generate as a consequence. A clear example of this antagonism was the concern that cutting back on the "Biden's Signature Climate Legislation".which, according to experts, would result in the loss of 77,000 renewable energy jobs in 72 Republican districts...