- US President Joe Biden has urged the United States House and Senate to “pass the agreement right away.”
- Biden and Republican Kevin McCarthy reached the “agreement in principle” to raise the federal government’s multi-trillion dollar debt ceiling.
- The positive news has inspired a recovery across financial markets, with crypto flashing green as capital flows into Bitcoin
Bitcoin (BTC) price is up 2%, with the rest of the crypto market flashing green in what can easily be assumed to be a weekend rally. However, the capital inflow comes after US President Joe Biden and Republican Kevin McCarthy reached the “agreement in principle” to raise the federal government’s multi-trillion dollar debt ceiling.
Bitcoin capital inflow as US President urges House, Senate to pass debt ceiling deal right away
Bitcoin (BTC) has recorded a capital inflow after United States President Joe Biden and Republican Kevin McCarthy reportedly reached an “agreement in principle” to raise the $31.4 trillion debt ceiling.
Earlier this evening, Speaker McCarthy and I reached a budget agreement in principle.
It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone. And, the agreement protects my and…
— President Biden (@POTUS) May 28, 2023
The development comes amid burgeoning concerns of a potential default by early June. However, the two leaders had a 90-minute phone call four days before the new month (May 27), reaching a tentative agreement to raise the federal government’s multi-trillion dollar debt ceiling, Reuters reports, citing two sources close to the matter.
According to Biden, the agreement will prevent the US from facing a “catastrophic default,” adding that the deal would go to the US House and Senate “over the next day.” Nevertheless, the head of state has urged both chambers to “pass the agreement right away.”
House Speaker and Republican Kevin McCarthy has confirmed the agreement in a Twitter post, blaming Biden for “wasted time and refused to negotiate for months.”
I just got off the phone with the president a bit ago. After he wasted time and refused to negotiate for months, we’ve come to an agreement in principle that is worthy of the American people.
I’ll deliver a statement at 9:10pm ET. Watch here:https://t.co/vmn31INPH5
— Kevin McCarthy (@SpeakerMcCarthy) May 28, 2023
Notably, the agreement will limit the US government’s spending for the next two years, excluding expenses related to national security. This is certain, despite there being no exact details of the deal as of the time of this publishing. Citing a source whose identity is concealed for obvious reasons:
Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025.
The news comes barely a month after US Treasury Secretary Janet Yellen warned of a default risk possibility as soon as June 1 if the debt limit was not put off or raised. The US Congressional Budget Office (CBO) also published a report on May 12 echoing Yellen’s call for Congress to “act as soon as possible,” saying, “the government would no longer be able to pay all of its obligations” at some point in the first two weeks of June if the debt limit remained unchanged.
Bitcoin sees capital inflow, crypto markets flash green
Bitcoin price has recorded a growing capital inflow following the debt ceiling news, recording a 2% increase on the day. The uptick enlivens former Wall Street trader Macrojack’s assertions on the importance of owning hard assets, as the dollar would be “printed into oblivion, “saying, “Bitcoin is the fastest horse in the race.”
The US Debt Ceiling talks are all show.
They’re going to print the dollar into oblivion.
You need to own hard assets to protect your wealth.#Bitcoin is the fastest horse in the race.
— MacroJack (@macrojack21) May 17, 2023
It also confirms Onramp COO Jesse Meyer’s proposal that Bitcoin would become “the winner during the last round of stimulus,” as was the case during the Covid-19 Pandemic.
#7 – When the debt ceiling is lifted & credit-contraction leads to economic crisis…
— Jesse Myers (Croesus ) (@Croesus_BTC) April 25, 2023
According to Meyer, raising the debt ceiling would prompt the Federal Reserve to print more money, which is bearish for the USD but bullish for BTC since the two trade inversely.