The Dual Threat to the US Economy: Debt Ceiling and Inflation.

A deal to raise the US debt limit has been reached, but investors still face challenges from stubbornly high inflation and potential interest rate hikes. The deal includes spending cuts, which could harm the economy if it slides into a recession. The personal consumption expenditures index rose 4.4% in April, indicating that inflation is not moderating as previously thought. Markets are now betting that the Federal Reserve will raise interest rates at its upcoming June meeting. While the debt ceiling issue may be resolved, the economy still faces uncertainty.