Markets Look for Debt-Ceiling Breakthrough
The US could default on its debt as early as June 1 if Congress does not raise the debt ceiling, according to the Treasury Department.
As a debt-ceiling resolution in the US remained elusive, world leaders from the Group of Seven met in Japan where supply chains and economic security were at the center of conversations. A joint statement issued at the conclusion of the annual summit maintained that G7 members “are not decoupling or turning inwards” in response to heightened tensions and rising challenges among global powers. “At the same time, we recognize that economic resilience requires de-risking and diversifying,” the G7 said, adding that leaders will promote economic investments and efforts to reduce dependencies in critical supply chains.
Intense competition between great powers and mounting security issues are increasing risks to economic growth and investment returns. Globalization has been slowing since the global financial crisis, and the open trade that has largely been the norm following the end of the Cold War looks set to splinter into regionalization amid geopolitical sparring. In the newest installment of the OUTFront series, PGIM explores the impact to the investment landscape as the world’s three big trading blocs rethink trade policies and boost strategic industries within their own borders.
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