fitch saying that the default probability here of the u.s.is very low but at the same time the repeated debt limit been shipped in washington is adding to downside risks to the rating. we did not really see much progress being made this week when it comes to an agreement. on top of that officials remain divided on pausing next month. >> some division amongst policymakers there and you can add to that the other big news, that was a blowout forecast coming through from nvidia. plus the breaking news well from singapore. cracks that's right we have gdp numbers out of singapore at the moment, we are seeing gdp year on year that first quarter final reading seeing a gain of zero point 4%. better than expectations of 0.2% , accelerating from the previous reading of 0.1. seasonally adjusted the quarter on quarter reading for the first quarter final gdp read is a contraction of 4/10 of one percent. slightly better than expectations of a contraction of 6/10 of 1%. also an improvement on the 7/10 of 1% contraction in the previous reading and we do know

you have this morning from fitch.n 2011, the downgrade to didn't actually happen until after an agreement is reached. when you think about the implications for assets, the dollar, what are you thinking about? the drama doesn't necessarily stop when they figure out the debt ceiling. jane: this is a huge part of the drama. there will be a massive amount of relief. but there will be ongoing tensions with respect to the budget. the credit rating companies have learned their lesson. they learned during 2011 and before that during the financial crisis. there is pressure on them to do their job to warm the market if there are weaknesses in the credit position of a company, or country. this is where we're at now. what are they thinking, what are they going to tell us, and how deep do these issues go? i don't think the drama will be over, but the headlines will calm down. dani: the s&p was heavily criticized when they did this in 2011. it culminated in their ceo 18 days later stepping down. go to think there is hesitancy, poli

fitch putting the u.s.rm currency default rating on negative watch the agency citing the standoff of the negotiations. >> first of all, let me tell the american public, i'm not going to give up we are not going to default. we're going to solve this problem. i will stay with it until we can get it done. let's be honest about this we have to spend less than we spent last year. it is not my fault the democrats cannot give up on their spending >> for lthe latest, let's bring in kayla tausche in washington kayla, where would we stand with a week to do before the x date >> reporter: frank, negotiators met yesterday and no br breakthroughs to report as the date moves closer. and new issues with fitch. this is why they wanted to begin negotiating in february and the white house and treasury statement saying the warning tonight, meaning last night, under scores the swift b bipartisan action to avoid crisis for the economy yesterday, optimism was scarce with the messaging of the process. the mccaccarthy's top negotia

fitch placed the u.s.n negative watch which is note worthy coming from a rating agency i wonder what you think of the tightening of financial conditions we have seen could have an impact on the u.s. economy. >> it depends on how long it lasts, of course with the fitch downgrade, that is about time. if any was teetering on the brink of default, they would not hesitate to downgrade. we have seen this happen before in previous debt crises in the united states. it should be no surprise it was a downgrade. people in the market have been talking about this it has been expected i don't know what else to say about the debt situation this is in the hands of the politicians right now. i personal am scared that they won't be able to find the concentration or belief they have to do what has to be done to keep the worst possible case from happening i'm hopeful they'll do well and faced with this challenge. >> with that, the whole world is watching as they get closer to def default. carl, thank you very much for joining

fitch saying the u.s. aaa rating could be cut.lt is a low probability event but given we have seen the repeated moves leading to near default, episodes that that is eroding the confidence in the government's repayment capacity. overall when it comes to governance being a weakness relative to aaa rated peers, fitch saying that the u.s. aaa rating could be cut. we saw a push up of the japanese yen relative to the u.s. dollar. su: kevin mccarthy has expressed optimism on striking the deal to avert a debt default. he says they have time to strike an agreement and get it done. his comments came after for our meeting between negotiators that he and president biden have handpicked. janet yellen has warned the u.s. could run out of money to pay its bills as soon as june 1. the strident government is asking police to consider a criminal investigation of the pwc scandal. it involves the use of confidential information to shop tax planning advice to clients. the ceo stepped down earlier this month after emails were released. another has been

the debt ceiling brinkmanship has resulted in a credit rating agency, fitch, placing the us triple—aceiling brinkmanship has resulted in the credit rating agency, fitch, placing the us triple—a status into negative territory. fitch said the increase reflects the political partisanship that is hindering the resolution to raise or suspend that debt limit. let us move to the latest fed minutes. the us central bank are still undecided on the outlook for interest rate increases. the aggressive rate hikes in the us last year had put pressure on central banks in the region to keep up. so what does this latest fed minute mean for interest rates in asia? i spoke to diana mousina, deputy chief economist at australia's amp. earlier, she said that we are getting very close to the peak of interest rates for many major central banks in the region. i suppose the biggest risk is really around future rate hikes and the potential for those rate hikes, because the sentiment over the past few months across most global central banks has been one where we are seeing central banks really take their foot of

status the debt ceiling brinkmanship has resulted in the credit rating agency, fitch, placing the usn ratings watch negative. fitch said the increase reflects the political partisanship that is hindering the resolution to raise or suspend that debt limit. two months after buying a failed lender. according to an e—mail sent by the chief executive to all employees on wednesday, the lay—offs do not include positions which are client facing and indian based support staff are also affected. the news of the lay—offs was first reported on axios. let us move to the latest fed minutes. the us central bank are still undecided on the outlook for interest rate increases. the aggressive rate hikes in the us last year had put pressure on central banks in the region to keep up. in the last hour we learned that south korea's central bank is holding its rates steady. i spoke to diana mousina, deputy chief economist at australia's amp. earlier, she said that we are getting very close to the peak of interest rates for many major central banks. i suppose the biggest risk is really around future rate hik

here's the headline out of fitch.at they're saying basically risks are elevated for the short time because of the remaining political agreement to be reached and executed prior to the x date it's about politics. and you could say, well, we have the reserve currency, right, in the u.s., that's going to make the u.s. safe and triple rated no matter what, but fitch does mention the fiscal trajectory in the united states deviates and continues to do to so from those of triple a peers and overridden by political considerations. it matters s&p got criticized for the same thing when they downgraded us in 2011 treasury, everyone is pointing to the fitch warning as a sign of urgency that they need to get something done let's do it. >> i know. mccarthy is on the tape right now saying we could get a deal at any time. we're getting used to these sort of constructive headlines. they do have to build in this pad, as you point out, it has to get written and takes a couple days, promised 72 hours for everybody to read it and the vote

fitch says it still expects a resolution to the debt limit before the so-called x date. austrian government is asking police to consider a criminal investigation of a pwc scandal. it involves -- tom seymour stepped on earlier this month after emails were released about the firm up as a guest activities. a former telcom executive has been brought in to conduct an independent review. a montenegrin court is released do kwon on bail. the decision applies to someone who served as the former cfo. earlier this month both won approval to be released on four to $30,000 bail. the payer will not remain -- pair will not remain in jail. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am su keenan. this is bloomberg. rishaad: let's focus in on what is going on in india and up a look at some of those stories that might be of interest or some of the get investors in the country people who invest in the country. sing said to speak at a summit taking place in terms of earnings. zee entertainment

no offense to fitch. they have the least juice over moody's with a negative watch or potential downgrade. in 2011, we were here. you woke up and "squawk box" had a downgrade and the market went haywire. you probably more than doubled your money if you bought at that time. >>> in europe, the german economy entering technical recession. now data from the stats office shows the contraction of .3% the stats office said german households spent 1.2% less in the first quarter because of the shock of energy prices stocks in europe were down a bit more on the higher inflation read than expected from the uk this morning, the dax is flat. same with the france and ftse 100. basically across the board, everybody is flat. what about the german recession? >> i wondered when they say technical recession. what does it mean? it is okay we're in a technical. >> it hasn't been declared >> for the household, don't worry. it is only technical this story i've covered a lot. thank god natural gas prices have come down tremendous

they are poised for quite a fall on the warning from fitch. it's not a reality and it hasn't been a downgrade, but there are indicators that this is going to be a real downdraft. >> yeah. that's essentially what they were saying in the note yesterday, warning of a downgrade. they didn't downgrade the nation, they said there's a possibility they could do so if we go without a resolution. when we talk about what happens in an event like this, we have to remember the precedent of setting a warning before you do the downgrade is part of the standard procedure, not just for fitch but the other major credit ratings agencies as well. when you look at 2011, the debt ceiling crisis at that time, s&p and moody said they were reviewing the united states for a potential downgrade. s&p actually followed through on a downgrade. moody's did not. they might be trying to get ahead of the curve in this case. it's an open question about whether or not the other credit rating agencies will try to move as well. broadly speaking, the story is that the independent a

now fitch is warning this time that this is looking more serious. at the same time, can i tell you, chris, wall street is divided on this. the stock market today is virtually flat. it's not moving a whole lot. the dollar actually strengthened over the last couple of sessions against other key currencies. that would suggest that the world still believes and wall street still believes they will come to an agreement. nonetheless, this big credit rating agency is issuing this warning that it could have to downgrade the united states credit rating, that could impact all of us. >> tom costello, thank you for that. >>> we got the latest data on u.s. home sales, they're a bit lower than expected. diana olick is here to break that down. what are the new numbers? >> these were so-called pending home sales, that's the number of signed contracts on existing homes signed in april. it was lower than expected. it was down 20% year over year. if you look at the why, it's because there is so little supply in the existing home market. in the existing market, people d

>> fitch has a perfect triple a rating on the credit worthiness of the united states.hat we're talking about here is the reputation of this nation to pay its bills in full and on time. what they said yesterday, fitch ratings, they said, well, we're on watch for a potential downgrade if the united states congress and the white house are unable to get something done by june 1st. suggesting if there is no resolution by that point in time, they would move relatively quickly to downgrade and officially take that aaa status down a notch. that's not happening yet, but we have to remember that s&p ratings did this in 2011. they put a notice for a downgrade and then ultimately downgraded the united states. that was even three days after president obama did sign a resolution. whether or not the other ratings agencies do the same, s&p has already stepped down, they never reraised the rating since 2011. moody's, the third other major credit ratings agency do they put a notice of a potential downgrade as well. we'll have to watch. >> not all of this is exceptionally surprising, rig

fitch putting the u.s. rating on watch on the back of the impasse.n the tech story is nvidia and the demand for ai chips that is lifting that sector. let's get to the broader economy of germany. gdp contracted for a second consecutive quarter pushing europe's largest economy into a technical recession. bloomberg's ali crook joins us. let's get into the numbers. what did we get? >> we got a revision downward across the board and this was an economy that was hoping they could get away this winter without a recession and as we discovered today not know. -0.3% and flatlining is quite a -- not on substantial revision downward. it was all down to the consumer. consumer spending less on goods and food and beverages and less on furniture choose, new cars spending less across the board. it is a change -- it is a change in mood in germany. this week we had downward revisions on manufacturing pmi or manufacturing came in weaker than anticipated. this has been contracting since july. there is divergence between the manufacturing side of the economy and services.

first, fitch last night placed the u.s.' credit warning on negative watch, and now dbs morningstar has put the u.s. on review as well. will the warnings force the fed's hand to to pause interest rate hikes? at at this hour looks like the markets are saying, absolutely not. right now fed funds futures show about a 50% chance of a 25 basis point hike in june. that's a big with spike compared with an 8% chance back on may 5th. and also back on may 5th where there was a 75% probability the fed would cut rates at the september meeting, forget pause, cut. there is now a more than 60% chance of a rate hike. the guessing game has banks, particularly the regionals, in limbo because, of course, financial market uncertainty hurts them in a way, outdistanced way. let's bring in former fdic chair sheila bair who knows just a thing or two about all sizes of banks. sheila, are these downgrade warnings from fitch and dbs morningstar going to force the fed's hand to pause and, if not, should they pause? >> right. well, i don't know if -- the

, also cut competence inventory cut costs, under a newly appointed ceo kohl's up 13% abercrombie & fitchocked on debt coronavirus says he and white house nowhere near agreeing to a deal kentucky congressman andy barr is here with the latest, next. stay with us. . hi, i'm sharon, and i lost 52 pounds on golo. i realized i needed to make a change when i looked in the mirror and did not recognize myself. i saw the golo commercial and i liked how they weren't actors. they just seemed like people that were just happy with themselves and had true results. since being on golo, i truly feel like i'm back to the best me i can be. try golo. it worked for me, and i'm real. (soft music) ♪ (upbeat music) ♪ ( ♪ ) ( ♪ ) ( ♪ ) -awww. -awww. -awww. -nope. ( ♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. maria: welcome back. a maryland mother daughter was killed by an alleged ms-13 gang member with a message for lawmakers, cheryl casone with details. cheryl: maria tammy nobles daughter strangled to de

the credit rating firm you alluded to, they're already swirling, fitch putting the u.s. in the credit watch negative. the company says the reason we're spending too much, political partisanship, with the spending weaker-than-expected tax receipts and as well as higher interest rates led to public finances to underperform. >> but the reality we're borrowing $51,000 every second. in nine years we're up to over 90,000 a second. i believe if you really dig into the 2011 s&p downgrade it wasn't because of the fight over the debt ceiling. it is because we provide no vision of how we were going to pay back our bonds. >> reporter: the president this weekend off to camp david, then delaware. the congressional lawmakers they're taking the week off with a 24 hour notice to come back if there is a debt deal. back to you. neil: mr. lawrence, thank you very much. doug collins right now, you remember mr. collins, former georgia congressman, former house judiciary committee ranking member. doug, good to see you. do you think this will end okay with our avoiding not only default we hope,

few days might look like >> the technicals and particularly as it pertains to ratings agencies the fitch headlines putting the u.s. aaa rating on watch, catching the attention of wall street this morning. jpmorgan's head of asset management speaking at a conference in d.c. saying the most nerve-racking part of the debt ceiling drama is not the day-to-day developments but the rating agency's moves. >> the rating agencies have their own fiduciary responsibility to act not in arrears. some of them act in arrears, but some of them are -- act in advance, and they need to do whatever they think they need to do that in and of itself, forget about what's happening in the government, can trigger all sorts of things that the world's not necessarily prepared for and then i'm not sure that the nuances are picked up. >> her point is that treasuries, particularly t-bills allows billions of transactions to occur every day, every millisecond. a downgrade and especially a default would change the risk tolerance for counterparts holding u.s. government debt it could caused forced selling to be clear, the

charles: the warning from fitch, was it sort of a nudge? >> i don't know.the 2011 thing, s&p 500 downgraded us slightly. i never understood that really. the united states will never stop pay its debt, ever. it is true legally, it is in the constitution, it is true technically. there is always revenues coming in. i never understood that argument. more interesting is the case being made by house speaker kevin mccarthy. he wants spending cuts, okay? this is not hard to understand. and until recently joe biden and the democrats do not want spending cuts. they have to have spending cuts because they have spent like drunken sailors in recent years and, charles, they're trying to make the case like all the excess spending like the omnibus bill last fall should be built into the baseline and that is something that has to be stopped. charles: right. >> that is why mccarthy keeps saying spending next year has to be lower than this year and there have to be caps on future years, 1% caps is his target. we'll see how it goes, what the baselines are but he's run circles,

>> contessa, thank you >>> coming up, look at shares of abercrombie & fitch.y're surging after reporting a surprise profit and raising guidance we have an interview with the ceo, next. >>> plus, cnbc is celebrating asian american and pacific islander heritage, sharing stories of influential business leaders like william wang, vizio founder and ceo. >> this is a place where everything is possible out of college, i started my first career as a technical support engineer, and today i run a multi-billion-dollar corporation. and 21 years later, we sell millions of tvs and two years ago, i talked to a company, vizio, and now we're proudly listed on the new york stock exchange so i'm here, grateful to be rean y kw,n ese journey. see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today

that leaves moody's and fitch.roblem is if we get a second downgrade, the country i'm talking about, then there are many funds, many money market funds and things like that that can't buy our debt, and that has adverse consequences. i think fitch did the right thing in telling everybody, this is what's out there, this is what could happen, this is what will happen if you guys really are dumb enough to let this country default. but i would like to think -- i don't know. i would like to think that the people at fitch and moody's said less about this would at least wait until there's an actual default before they did something like this, because the consequences are so severe. i would like to think this would happen after the fact, rather than before the fact. of course, if we get a deal, hopefully we get out of this alive in terms of our bond ratings and we continue to issue debt. >> let's talk about the politics now. stand by. we are bringing in michael steele, the former republican national committee, former lieute

fitch put the u.s. on credit watch for a possible downgrade although it says it expect a deal at the last minute. markets are pricing in increased odds the federal reserve will raise interest rates at the next two meetings. the gdp report showed a faster rate of growth than what had been previously estimated, with the u.s. dollar strengthening let's checkup -- check the boards. commodities are lower, like new york crude, wti off by 4% on the moment, snapping a three day advance. saudi arabia same people shorting the oral market should -- oil market should watch out, russia said it is unlikely opec and its partners will be cutting production in the near-term. gold futures are down, 9/10 of a percent, was reading one analysts said,. when institutional investors look for somewhere to hide out they go to gold, when individual investors look to hide out they go to the going. it is -- bitcoin. it is an interesting explanation. alex: i want to bring you to some of the red on the day snowflake taking its bigges

the economy that just the negotiating process could have on wednesday, major credit rating agency fitch ratings warned of a potential downgrade to the u.s.' aaa rating. only time will tell if that threat of a credit rating downgrade could galvanize negotiators into making a deal, frances. >> all right, brie, i want to ask you, how are the parties dealing with the issue now that most of the members will be heading home for the holiday weekend? >> reporter: even though a deal is not finalized, members of congress returning home throws a wrench in an already-compressed timeline democratic congresswoman pramila jayapal said thursday that they were told the earliest they would have to return to washington is sunday meanwhile, several democrats took to the house floor on thursday to call out the gop for sending their members home before a deal was reached. now this comes after days of concerns from democrats that the white house wasn't doing enough to push back on republicans and the debt ceiling stalemate frances? >> it will be a very intense week ahead hope they're able to chill and relax b

i am curious, are you concerned at all if this happens, if we run past the x-date, and if fitch wouldng that republicans will face blame or backlash and i'm not saying only republicans, but that republicans will face the backlash since it is true that republicans have supported clean daet ceiling increases in the very recent past? >> right. i am not going to disagree with you there that it seems that the republicans only care about spending when democrats are in charge, and the republicans have added a lot of money to this debt, and so they are not innocent, but at some point, we have to hit pause. no reason to default, and there is no reason to lose the credit rating, and if the date comes and goes of june 1st, we have to prioritize the spending, and guess what, in terms of the tax revenues, we get 11 times needed to pay the interest on the debt, so we pay that first, and we pay the other bills second, third and fourth down the line, and it means that we reprioritize america's bills until we negotiate a deal until it is finalized. >> some republicans say they don't believe janet yell

retail this past week, some did really well like abercrombie & fitch, others had a rough showing.ight now. >> i think consumer spending is slowing down, you know? what we do find is that income growth is not as strong as it was previously in part because the still-sizable gains for getting in the jobs market seem to be concentrated among lore paying occupations. more than half of the jobs created come from leisure and hospitality and health care and education. and those tend to have significantly lower average wages than the rest of the economy. maria: wow, this is a really good point that you're making. john, what about nvidia this week? did you see that sock on thursday, up 30%? -- that stock on thursday? right out of the gate, it was an incredible move. it actually was the dominant factor moving the nasdaq, and we're talking 20% higher year to date largely because of a handful of stocks involved in a.i., artificial intelligence. you take that out, the nasdaq would probably be lower. >> and that's exactly right. you have to be careful not to extrapolate too much good news from w

as negotiations on raising the debt ceiling contie, fitch ratings placed the u.s.'ing on rating watch negative on wednesday not an official downgrade but a warning that the agency could take that action fitch cited the partisan fighting in washington as a major reason for issuing that warning. during the 2011 debt crisis, poors did downgrade the u.s. even after negotiations reached an agreement >>> the race for the white house heats up as ron desantis officially threw his hat in the ring for the gop nomination. the florida governor releasing his first campaign ad, after a glitch-plagued twitter live stream with ceo elon musk. gabe gutierrez has more on the unconventional launch. >> reporter: florida governor ron desantis announcing his run for president in this new ad >> we need the courage to lead and the strength to win. i'm ron desantis, and i'm running for president to lead our great american comeback. >> reporter: but his new campaign also hitting a major technical snag, with so many listeners tuning in for an audio announcement on twitter spaces with elon musk

fitch cited the partisan fighting in washington as a major reason for issuing the warning. during the 2011 debt ceiling crisis, standard & poors did downgrade the u.s.' aaa rating even after an agreement was reached. >>> one of the most recognizable january 6 rioters has been sentenced to four and a half years in prison. a photo of richard barnett with his feet propped up on then-speaker pelosi's desk became one of the most well-known images from that day. he was convicted on eight charges, including theft of government property and prosecutors say he was armed with a stun device and ten-pound steel pole after he was convicted, barnett said he was the victim of political persecution. his lawyers said they will appeal >>> convicted murderer alex murdaugh is facing new federal charges. murdaugh, who is serving life in prison for killing his wife and son, has been indicted on 22 fraud-related charges. he is accused of cheating the family of gloria satterfield, his former housekeeper out of a settlement of nearly $3.5 million she died in alleged fall at murdaugh's south carolin

but after fitch ratings signaled the u.s. credit rating could be downgraded amid market uncertainty, the white house again blamed congress it? >> is just one more piece of evidence, if you will. so we have been laying out, again for months and months how catastrophic this could be if congress didn't do its job that included impacts to the credit rating of the united states, a reflection of our full faith and credit. >> we will see the president again before memorial day weekend when he honors two basketball teams here at the white house tomorrow and then he heads to camp david. biden's negotiators and the speaker's team will stay in communication over the weekend and the press secretary said today that biden can deal with this issue from anywhere, bret. >> bret: jacqui heinrich live from the north lawn. thank you. the house is now out forth memorial day recess but members are on a 24 hours' notice to come back if there is a deal or the possibility of a deal. senior congressional correspondent chad pergram is up on capitol hil

the move by fitch and the ratings arm of morning start caught the attention of lawmakers. kevin mccarthy says it won't compel action. when negotiators say near close but no deal yet. >> you think we're going to get a deal today? >> i don't think so. i don't think we're in that zone quite yet. everything is sensitive at this moment. there's a balance that has to be struck. there's a lot more work that has to be done. for the work that we're doing. >> any deal requires a combination of democratic and republican votes. fox is told the plan would raise the debt ceiling by several trillion dollar. conservatives says that veers away from what the house approved last month. some gop members worry it's a cop out. >> if it's true that we're talking about an additional $2.5 trillion of debt increase and if it's true that we're going to remove 3, 4, 5, six things in the limit save grow act, someone tell me that is an off ramp that we should take now. it's an exit ramp taken five too early. >> if enough republicans back, democrats have to pick up the slack. they won't stand for an inc

bold move by fitch. i think it was necessary though. i am still looking at the market and wondering what they are so muted, why there is no reaction from the mark in terms of this. it is significant. i think one of the issues is that this is the second time, right? we have already experienced a downgrade, s and p downgrading u.s. that 10 to 12 years ago. the second time around is not a shocker. there's also that belief that, listen, maybe this morning by fitch will actually give lawmakers the nudge they need to reach an agreement. i don't necessarily know if that will end up happening, but, hey, look, they are somewhat -- i don't want to say expose because or than they were a couple of days ago. >> i think the reason why investors are not worried is because it's the same old game all over again. you mentioned the one time that there was a downgrade, but the debt ceiling limit crisis, it's bad, it's bad and then the a second, we got it. we came to an agreement, it's all good and to. that's kind of like what it sounds like. yes, there cou

the fitch ratings wornd about the u.s. lenders fannie and freddie. how significant is that? does that indicate to you that fitch may downgrade the u.s. credit rating as s&p did in 2011? >> it would not have a material effect on markets. it would not have a material effect on contracts. if the other two agencies were to follow fitch, that's s&p and moody's, then that would have an impact. as much as i think this is going to go away, there is longer term damage. one is we're diverting attention in congress and the administration from things that we need done to promote sustainable growth and productivity. two, we are eroding trust even more domestically in the policy making process. and finally, we signalling to the rest of the world that we can't get our account together. neither of these three things, none of them, are good things. >> i sat down with the federal reserve. people who follow you know how critical you've been of the fed and how they handled inflation for more than a year now. but i thought this was interesting

>> well, fitch and moody's have to speak for themselves. as i said, when you have got a situation where you can default on your debt within a week and non-trufial possibility of that, it's simply not consistent with the aaa rating. going from aaa to d is a very bad rating transition. >> you know, few countries maintain debt ceilings. australia had one and abolished after political infighting. do you think it's time the u.s. do the same, get rid of the debt ceiling? >> i think you need to combine the funding decisions and budget decisions in a single act. all of these deficits that now need to be funded have been approved by congress in the past. so when you pass the budget, you need to pass the funding that goes with it. so, yes, i think the debt ceiling should be abolished. >> each time a spending bill is passed, that should be tied to the debt ceiling and automatically be raised to or should the treasury secretary have the unilateral power to raise it? >> either way it would come out to be the same. >> yeah, yeah. john chambers, thank you

case in point, fitch is signaling that it could downgrade u.s. debt putting us on rating watch negative. what does that mean? what does it do? where are we now? joining me now is white house communications director ben labolt. congratulations on the gig. welcome to the show. >> thanks. thanks for having me. >> where does the negotiation stand? >> we're getting closer to a deal. the president's negotiating team has been negotiating with house republicans multiple times a day since last sunday when the speaker and the president talked. they went late into last night. there was another meeting today. so, we're getting a bit closer. i think the good news is all congressional leaders have agreed that default is not an option. now there's a negotiation over the terms of the budget path forward. the president, his negotiators, are negotiating to make sure we don't give up key priorities, that we don't place on the backs of hard working americans that they have to fund a tax cut to the tune of $3 trillion for the wealthiest. and that we protect the econo

fitch and morningstar have, i believe at the moment, in different wording put the u.s.gs watch negative. and then bbrs has negative implications. when do you think they will make a decision as to whether they will downgrade the u.s.? >> well, you'll have to ask dbrs and fitch that question, but normally had be a decision that they would come to the a fairly quickly after this would be over. liz: well, that's in four days. less than five days away, june 5th is the day that the treasury department has said, that's it, that's the x date, we can't push it any further, we will run out of money. so even if there is a deal, clearly kevin mccarthy the, the breaking news as we just told you, was he's going to the hold a news conference. he's getting bold, is he not, hiking that this thing will pasg will pass. to the me, that still doesn't matter if you use the s&p example from 2011. >> i think the focus probably shouldn't be on what the rating agencies do or don't co, but the lasting impact this is going to have on the market. i think the u.s. are permanently pay a higher risk p

we had, i think you will see a downgrade from fitch and you may see a downgrade from others.s on, right, without paying bills. i don't think they really want to test that. if they do that, i think the implication of your question is what does that do to the economy? a really good job of trying to engineer a soft landing so far, but i don't think they have had a lot of credit. whether they continue to do so or not will be very difficult and this certainly would not help and could plunge it into a very severe recession.— it into a very severe recession. . ~' , ., , it into a very severe recession. ., ~ , ., , . recession. thank you very much for that analysis. _ recession. thank you very much for that analysis. dory - recession. thank you very much for that analysis. dory wiley, i for that analysis. dory wiley, president and ceo of the investment banking firm commerce street holdings in dallas for us. to the uk now — where the economy has been reeling from the biggest year of strikes in a generation. a cost—of—living crisis driven by soaring inflation has seen walkouts over pay

interest rates are up and fitch rating agency put america on credit watch negative fitch thinks we are borrowing too much. america is a much more risky place about that so they think. that seems to be a warning to biden who can't handle the idea we should spend less. all the show, fox polls show trump with a commanding leader over desantis, that was taken before the desantis launch. the pool asked if joe biden is a strong reader, two out of three said no, he's not. look at the finances of black lives matter, not good. facing encrypted, giving hooch contracts to family, hundred million dollars from america's corporations who have egg on their face. we cover it all thursday may 25, 2023 varney and co. is about to begin. ♪ stuart: life house. >> that's the band, the group. stuart: it is official ron desantis no longer on the bench. he has launched, the are not without technical glitches. >> is like the movie failure to launch. stuart: did you crash the internet? >> it was a disaster technically speaking. kant calls it success, twitter handle nearly 1 million people trying to get into the

crumby and fitch surprised wall street and pam cook this morning, which never happens.ars and cents. i was surprised because you see a lot of retailers closing in malls and you. certainly we've had those warnings from some of the retailers about slow sales, some of the big names in retail as well, but abercrombie and fitch beat analysts estimates for the quarter and raised its guidance for the rest of the year, which is also something a lot of retailers have not done. abercrombie and fitch credits the increased profits on inventory changes to cater to people heading back to the office and back to social events and also attracting more affluent shoppers. as that opening bell ring this morning, abercrombie stock shot up 18% however, that is one bright spot in the middle of ongoing concerns about the debt ceiling talks. and as we take you live to the big board for the latest numbers, certainly that is weighing heavily on the markets, the dow has dropped another 79 points in the last hour since my last report. down more than three quarters of a percent. the s and p 500 also

now, fitch ratings has said that the united states rating is sterling it's a aaa but they say that couldpast that june 1st deadline without a resolution, which would call into question very much the creditworthiness of the world's largest economy. >> this is an economic story assist political story, kristen, you're here for that i was so struck by some of the words in which fitch said. it said, the contested 2020 presidential election, brinksmanship over the debt limit, to advance political agendas and failure to reach consensus on the country's fiscal challenges are recent signs of the deterioration in governance these are outside observers saying the u.s. government is not working and blaming partisans on both sides. it's pretty stunning >> and i talked to republican and democratic sources overnight, savannah and hoda, and they say, this is an alarm bell essentially because of that strong warning about the partisan bickering and because of all of the implications for the american economy we saw finger pointing overnight, a source close to speaker mccarthy saying the white house should

fitch warning the coveted triple—a rating the us enjoys could be in doubt if this goes further, goeshoughts? it�*s absolutely possible and the political chaos here in washington standing directly in the path of the whole us financial system, especially the dollar and the balance in the dollar and the balance in the us, isn't doing anything to make anyone here or around the world feel more comfortable that the us is a stable place to anchor financial activity. who will blink first?- to anchor financial activity. who will blink first? that is the $1 trillion _ who will blink first? that is the $1 trillion question. - who will blink first? that is l the $1 trillion question. $34.1 trillion question. it is clear there is a framework they are working on clear there is a lot of discussion going around. with congress leaving town over the last day to go back home and the speaker and the president still not at the point where they have something on paper, we are right against the edge of it and it will take a few days even if they get the deal sorted to work its way through the house so over

fitch, one of the major credit rating agencies warned of a potential downgrade to the us credit rating if the deal isn't done. the us treasury department seized on this, saying it underscored the need for swift bipartisan action. the biggest sticking point remains spending. if they don't cut enough, they won't win over republicans, but if they do too much, they will lose some democrats who say they don't want to see cuts to social programmes that help the neediest americans. meanwhile, many lawmakers left washington for the long holiday weekend while the talks continue. that was michelle fleury reporting for us. and we may have some fresh development. in the past hour, the new— development. in the past hour, the new york times is reporting that they— the new york times is reporting that they may be closer to raising _ that they may be closer to raising the debt limit and cut spending. any agreement on extending the debt ceiling will have to pass the republican—controlled house of representatives and the democrat—controlled senate, and that may get rather tricky, as several right—wing r

fitch is saying get it together. we have to downgrade >> speaking of that. short-term bonds and those are el elevated what do you do with the volatility >> this is the tail risk we have the treasury trading at 7.05%. that is where it was yesterday there is fear this could get a little messy generally speaking, treasury has been orderly we see a high demand for treasury we are desensefensidefensive. it is not rallying overall yesterday was a strange day with the dow negative and the s&p and nasdaq up 1 and 1.75 you want to stick to quality you need to be brave 11 got ugly near the deadlines it will be messy if they have to pay certain things, it is the not -- it is not a sure thing. >> victoria greene, thank you. enjoy the long weekend >>> that is it for "worldwide exchange." "squawk box" is coming up next thanks for watching. ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ and this is ready to

fitch downgraded france over the weekend. they concerned over the public finances and the continued industrial action and social unrest the dax is down .40% here as well we are watching a couple of names. notable, infineon and in terms of sectors, technology is up .70%. infineon boosting that segment banks looking strong hsbc's profit basically tripled in the first quarter and they announced a higher share buyback than expected. hsbc is a strong point of green. other banks set to report. unicredit set to report tomorrow i'll be in milan speaking to the ceo. we have oil and gas down bp is dragging and basic resources down 1.3%. let's talk more about what happened at bp the profits did rise to $5 billion in the first quarter that beat expectation. the energy giant reduced share buyback and committed to using 60% of cash flow to buy back stock. the group forecast higher gas prices in europe and asia in the second quarter boosted by recovering demand in china the stock is down 5.5% broader oil is taking a cue from bp 5.5% shell i

fitch rating warned that the partisan breakdown in d.c. could mean that the u.s.he jobless claims, first revision for first gdp, home sales all of that due out today. >>> this weekend is memorial day and with it becomes one of the busiest travel days of the year. according to aaa, more than 42 million americans are expected to travel. joining me now is consumer travel reporter for "usa today" and author of the weekly cruising altitude column. so 42 million and we're back to pre-pandemic levels now for travel. >> oh, yeah, fully back. airlines are super booked. it will be crazy in the airports so pack your patience. >> a test of whether the airlines, staffing, and fda all have their stuff together. >> last summer a big issue was staffing. this summer the airlines have done their best over the past year to hire as many people as they can. they are doing better. the big problem seems to be is staffing at the faa. so air traffic controller, they still haven't been able to get rehired to the same level that they were at before the pandemic. and here in the northeast, f

limit by the deadline, ensure debt securities are paid on time and in full, or risk a rating downgrade fitchs they believe there will be a rez solution but says- >> but some believe the ratings agencies should be doing more in the meantime we spoke a short while ago with morris cramer, who was part of that group that downgraded the u.s. rating while at s&p in 2011 he told us that the ratings agencies this time around are acting "quite late and quite timidly. >> if you have a political system that gambles this way with the credit worthiness of the nation and the full faith and credit of the country, it has no business in aaa land, because what we're seeing now evolving i think is at least as severe as it was in 2011 in terms of the difficulty of finding a way out. and this is just not what you would expect such a dysfunctional system of a country with the highest level of credit worthiness >> the news seems to have had a muted impact on the stock market today. volatility in prior episodes crept up closer to the deadline and beyond that deadline date. however, treasury markets responded much e