Debt Ceiling Negotiations Are Center Stage For Investors: Biden, McCarthy Set For High-Stakes Meeting

President Joe Biden will meet House Speaker Kevin McCarthy at 5:30 p.m. ET  Monday to discuss the debt ceiling and attempt to reach a deal as a June 1 goverment default deadline approaches. 

Markets are anxiously awaiting evidence of a bipartisan compromise over the debt limit to prevent the catastrophic situation of the U.S. government running out of money in June, as well as specifics of the tax and expenditure measures in a debt ceiling deal. The S&P 500 index, which is closely tracked by the SPDR S&P 500 ETF Trust SPY, is trading at over 4,200 Monday, its highest value this year. 

Here are the most recent developments in debt ceiling negotiations Monday: 

• “We can get a deal tonight, we can get a deal tomorrow," McCarthy told reporters at the Capitol Monday afternoon. “Decisions have to start being made." McCarthy will hold a press conference around 7 p.m. ET. 
• "Nothing has been agreed to in negotiations with Biden on the US debt ceiling," McCarthy said earlier Monday, adding that an agreement before the deadline will likely happen.
• McCarthy arrived at the Capitol at about 10:40 a.m ET, according to the CNN. “Democrats, since they took the majority, have been addicted to spending and that’s going to stop — we’re going to spend less than we spent last year,” he told reporters. “I don’t worry about a default because the Senate could always take up our bill,” he added.
• White House negotiatiors arrived at the Capitol early Monday, with CNN reporting they did not respond to a series of questions regarding the debt ceiling discussion.

• House Financial Services Committee Chair Patrick McHenry, McCarthy's negotiator, said early Monday that all sides know the deadline and are working in good faith, despite significant obstacles.

• Biden contacted McCarthy from Air Force One on his way back from the G7 Summit in Japan earlier Sunday. McCarthy said the call was "productive."
• Biden said before leaving Japan he would propose a plan involving over $1 trillion in expenditure cuts on top of $3 trillion in deficit reduction, asking Republicans to "move on."
• According to Goldman Sachs, the U.S. Treasury's cash levels would fall below $30 billion by June 8 or 9, the bare minimum required to pay its debt commitments.
• Treasury Secretary Janet Yellen said that the U..S is unlikely to reach mid-June and still be able to pay its obligations, emphasizing the importance of the White House finding an agreement with Republicans to extend the debt ceiling, Bloomberg reported over the weekend. 

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