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FirstFT: US House passes debt ceiling bill

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The US House of Representatives brought the country closer to averting a default last night after it approved a crucial bill to raise the debt ceiling.

In a major victory for Republican House Speaker Kevin McCarthy, the House voted 314-117 in favour of the bill, after 165 Democrats sided with 149 Republicans and allowed him to see off a rebellion from some members of his own party.

In the end, 71 Republicans voted against the measure, many of them members of the hardline House Freedom Caucus.

The bill will now be sent to the Senate, which will also need to approve the measure in order for it to be signed into law by President Joe Biden and go into effect ahead of a June 5 deadline.

Here are two analyses I recommend on what the bipartisan deal means for the two men who crafted it:

  • Kevin McCarthy: When he won the speakership in January, there were doubts over whether he could control his party. Yesterday, McCarthy defied his critics, writes James Politi.

  • Joe Biden: The drama has barely dented the president’s agenda, writes Edward Luce, with Republicans coming out of the fiscal brinkmanship with little to show for it.

Here’s what else I’m keeping tabs on today:

  • Meetings on Ukraine: Foreign ministers in Nato meet in Oslo to discuss the war, while nearly 50 leaders are in Moldova, just 8km from a Russian-controlled separatist enclave, for the European Political Community summit.

  • European Central Bank: President Christine Lagarde speaks at a conference in Hanover, and the bank publishes accounts of last month’s policy meeting. The ECB also marks its 25th year since it replaced the European Monetary Institute.

  • Economic data: S&P Global publishes its manufacturing purchasing managers’ indices for the EU, UK and US, and eurozone inflation is expected to cool when figures are released today.

  • Results: Auto Trader, Broadcom, Dell Technologies, Dollar General, Dr Martens, Macy’s, Pennon and Rémy Cointreau report.

Five more top stories

1. Exclusive: The EU is working on a four-year multibillion euro financing plan for Ukraine after allies last year criticised the bloc’s haphazard and unpredictable financial support for Kyiv, where public finances are under immense strain because of Russia’s war. Read the full story.

2. Exclusive: A C$400bn Canadian pension fund has stopped making private deals in China and is closing its Shanghai office, following other large investors in dialling back activity in the world’s second-largest economy. Read more about the move by Caisse de dépôt et placement du Québec.

  • The FT View: China’s rebound is faltering, but the structural challenges its economy faces are far deeper and longer-term, writes the Financial Times editorial board.

3. Opec has barred several major media groups from attending its crucial production meeting, with reporters from Reuters, Bloomberg News and The Wall Street Journal denied invitations to the event at the oil group’s headquarters in Vienna. The move is unusual for Opec, with headlines from its meetings having the potential to move oil prices.

4. A future UK government should adopt a “general policy” of aligning with EU rules to improve post-Brexit trade, an independent cross-party business group has said. The recommendation was one of 114 proposals made in a report by the UK Trade and Business Commission yesterday.

5. The earth is already past safe limits for humans as temperature rise, water system disruption and destruction of natural habitats have reached boundaries, a study by a group of the world’s foremost scientists has found. Here are more details from the research published in Nature yesterday.

The Big Read

Montage of Intel co-founder Gordon Moore with tech brands including ASML, Intel, Samsung
© FT montage/Reuters/ASML/Ian Bott

Over the past five decades, the pace of progress in the technology industry and products such as the iPhone have been made possible only because semiconductors have been able to get tinier and tinier. But experts warn that this continuous feat will soon run into the fundamental limits of physics, raising a big question: how small can chips get?

We’re also reading . . . 

Chart of the day

Despite concerns over rising interest rates and the health of the world’s biggest economy, the $1.4tn US junk bond market is looking surprisingly resilient. Central to its relative strength is the scarcity of supply.

Column chart of Issuance YTD for 2023 and previous years showing Meagre new borrowing in the US junk bond market

Take a break from the news

Meet the woman dressing Gen Z. Sofia Prantera created streetwear label Aries as a move into denim with a more high-fashion offering. Fashion writer Kate Finnigan explains how Aries gained a cult following with young people.

Additional contributions by Emily Goldberg and Ben Wilhelm

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