Bonds & Stocks
Republican and White House negotiators are moving closer to an agreement to raise the debt limit and cap federal spending for two years, according to people familiar with the matter, as time grows short to avert a catastrophic US default. The two sides have narrowed differences in talks over recent days, according to the people, though the details agreed to are tentative and a final accord is still not in hand. The two sides have yet to agree on the amount of the cap.
Economy
Treasury yields edged higher as strong economic data raised the possibility of more interest rate rises, dampening some of the optimism about a potential debt-ceiling deal. A report on consumer spending painted a picture of a resilient economy, potentially adding impetus to bets that the Federal Reserve has further to go in bringing inflation back to its target. The personal consumption expenditures price index, one of the Fed’s preferred inflation gauges, rose by a faster-than-expected 0.4% in April.
World
Iran released Belgian aid worker Olivier Vandecasteele in a prisoner swap mediated by Oman. Vandecasteele has undergone medical examinations in Oman and will return home on Friday night, Belgian Prime Minister Alexander De Croo said. Gulf sultanate Oman said it brokered a prisoner exchange between Iran and Belgium, without naming the prisoners involved. Iran’s foreign minister spoke by phone with his Omani counterpart on Friday, the ministry said, without mentioning the exchange.