Emerging US Debt Deal Would Raise Limit, Cap Spending for Two Years

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.

Under the terms of the emerging agreement, defense spending would be permitted to rise 3% next year in line with President Joe Biden’s budget request.

US Treasury yields edged lower across the curve and US equity futures pointed to gains at the open. The dollar slipped against major peers after rising to around the strongest level since March earlier.