What happens? (January 15-21)
The United States reaches its debt ceiling
The United States reached its borrowing limit of $31.4 trillion on Thursday, setting the stage for a bitter tax fight in Congress on raising the limit. Treasury Secretary Janet L. Yellen said the government would take โextraordinary measuresโ, at least until the beginning of June, to continue paying their bills. Democrats and the White Houseas well as forecasters and economists, i have warned that the nation risks financial crisis and other dire economic scenarios if lawmakers don't raise the cap before the Treasury Department exhausts its ability to buy more time. But the Republicans have said they will not raise the debt limit again, unless President Biden agrees to deep cuts in federal spending.
โSamcoinsโ and the last days of FTX
As the government continues to build a case against the founder of cryptocurrency exchange FTX, Sam Bankman-Fried, more details about how the exchange works are emerging. Rivals said that Mr. Bankman-Fried often promoted digital currencies, known as โsamcoins.โ Mr. Bankman-Fried was said to have used his influence to persuade people to buy large amounts of coins, artificially inflating their value, to make his cryptocurrency trading company, Alameda Research, appear healthier than it seems. really was. (Mr. Bankman-Fried has denied allegations that he tried to manipulate the cryptocurrency markets.) Furthermore, documents obtained by The New York Times show that FTX executives expressed concern about the use of client funds in the weeks leading up to the company's collapse.
More layoffs at Big Tech
Two of the biggest players in the tech industry announced last week that they would cut thousands of jobs. Microsoft said on wednesday that would lay off about 10,000 workers, and Alphabet, the parent company of Google, said friday that would lay off 12,000 employees. Across the tech industry, employers are pulling out after several years of frenzied hiring to cope with the pandemic-driven surge in online services. Nearly 200,000 tech workers have lost their jobs since the start of 2022, according to Layoffs.fyi, which tracks job cuts in the sector. Even the industry's power players have been affected: Apple is the only major company that has yet to announce significant cuts. Satya Nadella, Microsoft's chief executive, told the World Economic Forum meeting in Davos, Switzerland, last week that "frankly, we in the tech industry are also going to have to be efficient."
Understand the US debt ceiling
What is the debt ceiling? The debt ceiling, also called debt limit, is a cap on the total amount of money the federal government is allowed to borrow through US Treasury securities, such as bills and savings bonds, to meet its financial obligations. Because the United States runs budget deficits, it must borrow huge sums of money to pay its bills.
Whats Next? (January 22-28)
Initial estimates of economic growth
The Bureau of Economic Analysis will release initial estimates for economic growth in the United States in the fourth quarter of 2022 on Thursday. The report on gross domestic product is likely to show that economic output, adjusted for inflation, increased at an annual rate 1.5 percent in the quarter, according to forecasters. That would represent a slowdown in the rate of 3.2 percent in it third quarter. The Federal Reserve's campaign to control inflation by raising interest rates is hurting the economy, especially the housing market. Although consumer spending has slowed, the economy has shown surprising resilience after contracting in the first half of last year.
