The bill, which was agreed upon over the weekend between the White House and Speaker of the House Kevin McCarthy, to prevent reaching the debt limit, has been approved by both the House of Representatives and the Senate. It is anticipated that President Biden will sign the bill into law today, Friday. The Fiscal Responsibility Law suspends the debt limit until January 1, 2025, therefore reaching an agreement is postponed until after the next presidential elections in 2024. The fiscal impact of the package is estimated to be approximately 0 .2% of GDP.
There was a strong employment report for the month of May, in which non-farm payrolls registered an increase of 339,000 positions, considerably higher than the 195,000 expected by the market. This reading puts pressure on the Fed to continue with its restrictive monetary policy, also postponing the rate cut. However, it must be taken into account that unemployment rose from 3.5% to 3.7%, a change that would be explained by an increase in people entering the labor market but who have not found a job.