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The partisan standoff over the debt limit, which hardened over the weekend when 43 Senate Republicans said they would not support a clean debt-limit increase, sets the stage for severe turbulence in the financial markets, experts warn. 

The yield on Treasury bonds maturing next month spiked last week, signaling that investors are already preparing for the possibility that President Biden and Republican leaders in Congress won’t reach a deal before the Treasury Department runs out of money next month.  

Biden will meet with the top four congressional leaders at the White House Tuesday to discuss how to avoid a default, but lawmakers expect little progress from the meeting. It’s the first face-to-face meeting between Biden and Speaker Kevin McCarthy since Feb. 1. 

There’s growing pessimism in Washington and the financial markets that political leaders will negotiate a long-term deal by early June, the deadline set by Treasury Secretary Janet Yellen.  

If an agreement doesn’t come together in the next month, congressional leaders will have to agree to a short-term extension of the debt limit to give themselves more time to negotiate.  More debt ceiling coverage from The Hill: Pressure grows on Biden to bend in debt ceiling talks Debt limit battle: How we got here

Without a short-term agreement, the US would go past the so-called “X-date” and face major turmoil in the markets.  

“I genuinely believe there’s a better-than-50-percent chance that there will be default, it will occur over a weekend and when the chaos it creates becomes obvious to all the players, they’ll have to reach some sort of accommodation,” said former Sen. Judd Gregg (R-N.H.), who previously served as Senate Budget Committee chairman and an advisor to Senate Republican Leader Mitch McConnell’s (Ky.) leadership team. 

“The potential is pretty dire,” he warned. “Right now, you don’t have the leadership to solve the problem, that’s the bottom line.” 

Gregg said McCarthy faces a challenge to his speakership if he brings a debt-limit bill to the House floor without major fiscal reforms, but the cuts that he’s proposing don’t have a chance of passing the Senate. 

McConnell’s support for a letter signed by 43 Senate Republicans declaring they will not support “any bill that raises the debt ceiling without substantive spending and budget reforms” has failed to move Democrats away from insisting on a clean debt-ceiling increase.  

“I don’t know what Democrats have to negotiate,” said a senior Senate Democratic aide, who pointed out that Republicans agreed to raise the debt limit three times under former President Trump without drama. “We’re not the ones being inconsistent.” 

“At the end of the day, a lot of their behavior is playacting,” the aide said, predicting a spike in stock and bond market volatility will pressure Republicans into backing off their demands. “They have investments, too.” 

The aide, pointing to the downgrade of the nation’s credit rating in the 2011 debt-limit standoff, said that this year’s battle in Washington over the debt ceiling would also shake the financial markets.

“We have in the past. I don’t know why this would be different,” the aide said.  

Financial markets are already starting to show signs of stress related to the impasse over the debt ceiling. 

One-month Treasury bills maturing around a projected date in early June, when the government could run out of money, saw their yields spike to 5.76 percent last week. 

Yields have climbed far above recent averages closer to 4.5 percent and significantly higher than the recent low of 3.3 percent in April. 

“The Treasury bills curve appears to imply risk of disruption in June, July, and October,” Goldman Sachs chief economist Jan Hatzius wrote in a note last week to investors. 

Treasury bills maturing in early June were trading at more than a 50-basis point discount compared to May and July at the end of last week. 

“Investors are paying a healthy premium to own bills that mature in May while demanding hefty compensation to hold T-bills that are maturing in the first half of June,” analysts for Wells Fargo wrote in a note to investors last week. 

Wall Street insurance policies, which are known as credit default swaps, against one-year Treasuries hit a record-high spread of 1.77 percent late last week in a spike that was notable both for its timing and its size. 

“There is likely genuine fear that a divided government and increased political polarization could make finding a solution less likely. Meanwhile, the dual threats of rising deficits (with larger federal payments, some indexed to inflation) and higher Treasury debt service costs also increase the chance of an accident, contributing to the higher perceived riskiness of owning US debt,” Deutsche Bank analyst Steven Zeng wrote in a May 5 note. 

Uncertainty in the Treasury market, which is already dealing with one of the fastest quantitative tightening cycles in decades, could spell more trouble for the U.S. banking sector. 

Sen. John Cornyn (Texas), an advisor to the Senate Republican leadership team, said local and regional banks in his state worried about losing deposits. 
“This is a very dangerous situation. There’s been a big shift in deposits to places people perceive as safer,” he said. “All of them are nervous, our community bankers, our regional bankers. We need to try to calm this down.”  

Cornyn said the possibility of a national default isn’t helping to calm the jittery banking sector. 

“I think it’s creating unnecessary anxiety,” he said.  

One senior Senate Republican aide warned that a drop in demand for Treasury securities could trigger a broader market selloff.  

Treasury security auctions will likely become increasingly sensitive to the Treasury Department’s looming X-date, analysts say.  

“Yields are elevated beginning with the June 6 maturity, which the Treasury in January suggested was the soonest the Treasury could exhaust resources under the debt limit. The yield is highest around mid- to-late-July maturities, when we think the Treasury will have exhausted resources under the debt limit if it has not in June,” analysts for Goldman Sachs wrote. 

Auctions scheduled for this Thursday for four-week and eight-week bills due to mature within this time frame could see some additional stress, as could auctions on May 25, June 8 and June 15. 

The Bipartisan Policy Center argued in an analysis published Tuesday that “managing Treasury security auctions and meeting all obligations will become increasingly challenging as reserves dwindle.”  

“Concerns are also mounting that the country could find itself in a similar position to 2011, when Standard & Poor’s downgraded the U.S. from its AAA rating,” the think tank said. 

Yellen warned in an interview with ABC’s “This Week” that “it’s widely agreed that financial and economic chaos will ensue” if Congress fails to act by the deadline.   Debt limit battle: How we got here US could default on national debt as soon as early June: analysis

A report published by the Penn Wharton Budget Model Monday said the deadline to raise the nation’s debt ceiling will hit sooner than previously thought because tax receipts in April fell below projections.  

Alexander Arnon, the director of business tax and economic analysis for the Penn Wharton Budget Model, said “we found, as noted by the Treasury secretary and by the Congressional Budget Office, that tax receipts in April came in quite a bit lower.”  

“There was a drop off [in tax receipts] relative to what was expected and we are much closer [to default] than people had hoped earlier this year,” he said.  

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The ‘scary spotlight’ on music stars amid Kneecap terror charge

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May 23, 2025

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The 'scary spotlight' on music stars amid Kneecap terror charge

Before the amps are even switched on in Brockwell Park, there’s been a lot of noise about who should or shouldn’t be performing.

It’s where Irish hip-hop trio Kneecap are set to play their first major show since band member Mo Chara was charged for allegedly displaying a flag in support of the terrorist group Hezbollah at one of their gigs.

Before that, there had been calls for festivals to reconsider booking the band over their political stances, and several have done, which prompted artists like Brian Eno, the Mystery Jets and CMAT to sign an open letter accusing Westminster and the British media of a campaign to “remove Kneecap from the public eye”.

They put their names to wording that said “in a democracy, no political figures… have the right to dictate who does and does not play at music festivals.”

The band have since claimed they’re the victims of “political policing” designed to silence their views on Gaza.

So what’s the reality like for artists who are outspoken at a time when the world is so divided?

As some of the biggest names in music gathered in London for the Ivors, an annual celebration of songwriting, Self-Esteem – aka Rebecca Lucy Taylor – said the level of scrutiny can be “terrifying”.

‘The problem with the internet’

She told Sky News: “The problem with the internet is you say one thing, which gets scrutinised, and then you shit yourself, you really do… then you’re advised not to. And then you’re like ‘don’t advise me not to!’

“You second-guess anything you want to say any more… but any time I do that, I think ‘well that’s why you’ve got to say it then’.”

She said it can be frustrating that focus turns on to pop stars’ opinions instead of “the people doing the bad things”.

Read more:
Why are Kneecap controversial?

Self-Esteem - aka Rebecca Lucy Taylor - spoke to Sky News about the topic.
Image:
Self-Esteem, aka Rebecca Lucy Taylor

‘Being a pop artist isn’t just about the music’

Former Little Mix singer Jade said: “To be a pop artist these days, it’s not just about music, it’s: ‘What’s your political stance?’

“I’ve always been quite vocal about those things, but in doing so you have even more of a scary spotlight on you, constantly assessing what your thoughts are as a human…it is scary.”

Trinidad-born London artist Berwyn, whose songs depict his struggles with UK immigration, says: “Silencing freedom of speech… is a road we don’t want to walk down.

“I’m not a politician, this is a very complicated issue, but I do absolutely believe in a human’s right to express themselves freely.”

But is that freedom of speech dependent on what side you’re coming from?

Berwyn speaking to Sky News
Image:
Berwyn speaking to Sky News

‘Unethical investments’

Soon, an event called Mighty Hoopla will take place at Brockwell Park as part of its programme of six festivals this summer.

Artists performing at that are coming under increased pressure from pro-Palestine groups to quit because it’s owned by a company called Superstruct, which has links to an American investment firm called KKR.

Critics argue that any KKR-affiliated events should be a red flag to artists as campaigners claim it “invests billions of pounds in companies” that do things like “develop Israeli underground data centres”, and they say it has shares in companies that “advertise property on illegally occupied land in the West Bank”.

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Mighty Hoopla itself has said while it “cannot control investments made in our parent companies”, it wants to “state its clear opposition to KKR’s unethical investments”.

And Superstruct – which puts on over 80 festivals around the world – says while horrified by the crisis in Gaza: “We are aware that there is a significant amount of debate… around our festivals.

“Our owners, made up of our promoters and several investment firms, support us to achieve the highest standards… fans and artists rightly expect.”

They insist that operationally, Superstruct is independently run and all its “revenue and profits… remains entirely within our business… towards the ongoing development… of our festivals.”

Read more from Sky News:
Kid Cudi says Diddy ‘messed with his dog’
Bono calls for Israel to be ‘released from Netanyahu’
Chris Brown posts message as singer is bailed

Even deciding where to perform can have political connotations for musicians these days.

As Tom Gray, a founding member of the rock band Gomez, now chair of the Ivors, explains: “The amount of commercial interest required to get a young artist into the public eye means they have to keep their head down a lot and that’s a terrible shame.

“It’s not just artistic expression, but personal human expression is one of the fundamental things that allows people to feel they have agency.”

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Sports

Bennett scores 2 as Panthers take 2-0 series lead

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May 23, 2025

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Bennett scores 2 as Panthers take 2-0 series lead

  • Associated Press

May 22, 2025, 11:01 PM ET

RALEIGH, N.C. — Sam Bennett scored one of his two goals in Florida’s three-goal first period, Sergei Bobrovsky made 17 saves and the Panthers beat the Carolina Hurricanes 5-0 on Thursday night to take a 2-0 lead in the Eastern Conference final.

Gustav Forsling and Matthew Tkachuk also scored in another tone-setting opening 20 minutes for the reigning Stanley Cup champions, while Carter Verhaeghe had three assists.

Bennett scored a second time by skating in to clean up an attempt at the right post in the final minute of the second period to make it 4-0, ending a long shift in Carolina’s end prolonged by Hurricanes defenseman Brent Burns being stuck on the ice after breaking his stick. Aleksander Barkov added a goal midway through the third as punctuation.

Bobrovsky had his third shutout of the playoffs this year and the sixth of his career, with Florida’s defense smothering a Hurricanes team that typically peppers the net with shots but found little daylight.

Florida had already ripped home-ice advantage away Tuesday night with a 5-2 win, the opener in a rematch of the 2023 conference final swept by the Panthers with four one-goal wins. Florida only tightened its grip on the series with this one and now heads back south to host Game 3 on Saturday night.

On the other bench, the Hurricanes found themselves on the receiving end of a crushing loss by a jarringly lopsided margin. And it marked their 14th straight loss in a conference final, going back to sweeps in 2009, 2019 and the ’23 tilt with Florida.

The Hurricanes managed just three first-period shots and just seven through two periods, prompting a typically rowdy home crowd to vent its frustrations with two chants of “Shoot the puck! Shoot the puck!” Carolina had a brief boost when Sebastian Aho scored on a turnover in the first minute of the second period to cut the deficit to 3-1.

But Florida successfully challenged that the play was offsides. It turned out Burns’ stick-check on Tkachuk near the blue line forced the puck back into the zone and right to Aho in the slot for the finish.

By the third period, Carolina had pulled veteran Frederik Andersen from net and went with backup Pyotr Kochetkov for the final period.

It wasn’t all great news for Florida. Veteran forward Sam Reinhart was knocked from the game in the first period after taking a hit from Aho in the left leg, causing Reinhart’s knee to bend awkwardly.

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Sports

Danes oust Canada at hockey worlds; U.S. wins

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May 23, 2025

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Danes oust Canada at hockey worlds; U.S. wins

  • Associated Press

May 22, 2025, 02:15 PM ET

HERNING, Denmark — Nick Olesen scored with 49 seconds left as Denmark stunned Canada 2-1 at the ice hockey world championship Thursday to advance to the semifinals.

“I have no words, it’s unbelievable,” Olesen said after Denmark reached the last four for the first time. “The fans here were cheering for us the whole game and they helped us get the win. It’s crazy.”

Denmark, in the sold-out arena in Herning, had tied it with 2:17 remaining when Nikolaj Ehlers scored through traffic in only his second game at the tournament following his Winnipeg Jets being eliminated from the NHL playoffs.

The Danes had pulled goaltender Frederik Dichow for the extra attacker before Ehlers struck.

Canada outshot Denmark 30-11 in the first two periods but couldn’t solve Dichow, who made 39 saves in all, until 5:17 into the third when captain Sidney Crosby fed Travis Sanheim to score into the roof of the net. Canada was outshot 22-10 in the final period, though.

Denmark has only two NHL players at the worlds, while Canada has only two who don’t play at the NHL level.

“I’m disappointed,” Crosby said. “We got better as the tournament went on. I don’t think tonight was necessarily our best, but we still found a way to give ourselves a lead … but it turned pretty quick.”

Crosby returned to the worlds for the first time since 2015, when he captained Canada to gold. He was expected to do it again with teammates like Nathan MacKinnon.

Canada is the most successful nation at the tournament with 28 titles but has finished empty-handed in the past two editions after it was beaten by Sweden in the bronze medal game last year.

It was only the second win for Denmark over Canada at the worlds.

The semifinals are set for Saturday: Denmark will play Switzerland; and the United States will face Sweden.

Earlier on Thursday, the U.S. advanced by beating Finland 5-2 backed by Conor Garland‘s two power-play goals

Trailing 2-1 in the middle period, the Americans needed 71 seconds to turn things around when defenseman Zeev Buium put home a rebound at 23:53 before Garland’s second goal restored the U.S. lead.

“I really liked how we stayed with it and built as the game wore on,” U.S. head coach Ryan Warsofsky said. “We got off to a bit of a slow start but really found our game as time wore on. I give our guys a lot of credit as they beat an excellent hockey team today.”

Garland had given the U.S. a 1-0 lead 4:50 into the game when he received a cross-ice pass from Logan Cooley to beat goalie Juuse Saros from the right circle.

Finland tied it at 1-1 on Eeli Tolvanen‘s power-play goal. Patrik Puistola scored from the slot on another power play 7:46 into the second period for Finland to take a 2-1 lead.

The Americans added two more goals in the third. Shane Pinto scored the fourth 5:52 into the final period and captain Clayton Keller finished the scoring into an empty net.

The U.S. team hasn’t won a medal since taking bronze in 2021. The Finns have been waiting for a medal since they won gold in 2022.

Sweden delighted the home crowd in the Avicii Arena in Stockholm by eliminating defending champion Czechia with a 5-2 victory.

Lucas Raymond and Leo Carlsson led the co-host with two goals each.

Earlier in Herning, last year’s runner-up Switzerland advanced by blanking Austria 6-0.

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