Good morning. US stock futures traded lower in Monday morning trading as investors continue to monitor ongoing negotiations over the government's debt ceiling.

"If I had to sum up my practical skills, I'd use one word: Survival"

George Soros

Top News

Biden, McCarthy to meet over debt standoff

WHAT: US President Joe Biden and House Speaker Kevin McCarthy can't seem to get enough of each other -- at least that's the way it seems as the two are scheduled to meet again this week to iron out the pending debt crisis facing the US government.

WHY: According to economists, the current impasse over the debt ceiling has the potential to put more strain on the US economy as a debt default could trigger a stock market selloff, a surge in borrowing costs, and potentially tip the US into a recession.

Fed Exec: Steady does it...

WHAT: President of the Minneapolis Fed Neel Kashkari is giving his "two cents" on what he believes might be the best course of action for interest rates. According to the Wall Street Journal, Kashkari said he could support holding interest rates steady at the Federal Reserve's next meeting in June.

WHY: The Federal Reserve has raised interest rates sharply over the past year as it tries to battle historic US inflation following the Covid-19 pandemic.

"China is a challenge..."

WHAT: UK Prime Minister Rishi Sunak didn't hold back on sharing how he really feels about China! Speaking at the conclusion of the G7 summit in Japan, Sunak said China poses the "biggest challenge of our age to global security and prosperity"

WHY: Sunak added that countries should not seek to fully "decouple" ties from China, but rather "de-risk" to prevent China from using "economic coercion" to destabilize the affairs of other sovereign countries.

In Other News

G7 leaders: AI standards needed

 WHAT: Leaders of the Group of Seven Nations aren't sold on letting the artificial intelligence hype train run wild! In fact, they're calling for the development and adoption of technical standards to keep AI "trustworthy", as governance has failed to keep pace with the growth of the technology.

WHY: While acknowledging differences in how AI should be regulated, heads of the G7 member states agreed to create a ministerial forum to discuss issues around AI such as copyright and disinformation.

Aussie regulators put the brakes on BNPL

WHAT: The wild wild west days of the unregulated "buy-now-pay-later" (BNPL) sector may be coming to an end — in Australia at least. The Australian government said it will introduce laws that treat BNPL services as a credit product in a bid to protect consumers.

WHY: Australia, home to about a dozen listed BNPL providers, has about 7 million active accounts that resulted in A$16 billion ($10.9 billion) of transactions in 2022, up 37% from the previous year.

That's a lot of debt!

WHAT: Hold on to your wallets folks, because Americans are taking credit cards on a wild spending spree! According to data from the Federal Reserve of New York, US credit cardholders owe $986 billion in debt, $59 billion higher than the record set in Q4 2019.

WHY: The uptick in credit card debt comes as the US has been grappling with higher than usual inflation and rising interest rates that make the cost of borrowing more expensive.

Key Economic Events

• Monday - Fed's Bullard Speaks On Policy, Fed's Bostic and Barkin Speak At Conference

• Tuesday - Fed's Logan Gives Welcoming Remarks

• Wednesday - FOMC Meeting Minutes

• Thursday - US GDP Annualized Q-o-Q

• Friday - No Major Economic News

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