Please find below our Investment Market Update as at 19th May 2023.
In this week’s update:
- Will the US run out of money?
- How are the Markets reacting?
- Not a dept spiral but a wage spiral
- A slowdown in the property market hits Purplebricks
- UK consumer confidence improves
- How analysts often get it wrong
Will the US run out of money?
Dominating many of the headlines for investment markets has been the US debt ceiling.
If lawmakers can’t agree to allow more borrowing, then the US could default on its liabilities. It’s known as the ‘debt ceiling’.
According to the Telegraph, Federal Reserve debt was 65.8% of Gross Domestic Product (GDP) but now it’s 98%. Interest rates are also much higher which means the government has higher servicing costs.
The debt ceiling can be raised, but only if it can be voted through the House of Representatives, which has a Republican majority. The Republicans are trying to use the deadline to pressure Joe Biden to agree to spending cuts.
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Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.