US President Joe Biden and Republican Kevin McCarthy have reached a preliminary agreement to raise the debt ceiling. A default by the USA is thus likely to be averted.
The bill must be passed in both chambers of Congress and signed by the president as soon as possible. The next hurdle will be the vote in the House of Representatives on Wednesday, where the Republicans have only a very narrow majority. The months-long dispute had brought the United States to the brink of insolvency. If this had happened, a subsequent global financial crisis could have triggered a sharp economic downturn.