Default X-Date Looms, Intensifying Debt Ceiling Discussions: McCarthy Says Not 'Everybody Is Going To Be Happy'

House Speaker Kevin McCarthy said on Thursday that debt ceiling negotiators "made some progress," but open issues remain. "I don’t think everybody is going to be happy at the end of the day. That’s not how this system works," he added.

McCarthy's remarks came after days of lengthy negotiations between White House officials and senior Republican lawmakers about the need to increase the debt limit before the June 1 deadline. Treasury Secretary Janet Yellen said that the U.S. government may begin skipping payments beyond the X-date. 
On Wednesday, Yellen emphasized that if the White House and House Republicans fail to reach a compromise in time, "there will be some difficult choices to make."

Less than 150 hours, or around six days, separate the U.S. from a debt default, causing rating agencies to start to take action, with Fitch putting the U.S. debt on negative watch, possibly pointing to an imminent downgrade. 

McCarthy also said Thursday that he is not concerned about the Fitch Ratings watch, and that he has directed negotiators to work 24 hours a day to get a debt limit agreement.

Fox News Senior Congressional Correspondent, Chad Pergram, tweeted that the parties are getting closer to a deal in the debt limit discussions, adding that one person involved with the talks would not rule out an agreement being reached on Thursday.

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Market Reaction: Dollar and S&P 500 Rise, Yields On 1-Month T-Bill Fall

Yields on the default-sensitive Treasury bills maturing after the June 1 deadline fell to 5.77%, after hitting highs of more than 6% overnight. 

Futures on the S&P 500 Index, which are closely tracked by the SPDR S&P 500 ETF Trust (ARCA: SPY), were 0.3% higher on Thursday to 4,156. 

The dollar also gained in response to the news on the debt limit front and following better-than-expected economic statistics released Thursday morning. The U.S. Dollar DXY index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (ARCA: UUP), was 0.3% higher for the session. 

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