• A meeting between President Joe Biden and congressional leaders did not lead to any major breakthroughs on the U.S. debt ceiling impasse, but Biden and House Speaker Kevin McCarthy (R-Calif.), Senate Minority Leader Mitch McConnell (R-Ky.), House Minority Leader Hakeem Jeffries (D-N.Y.) and Senate Majority Leader Chuck Schumer (D-N.Y.) will meet again on Friday. Congressional and White House aides plan to continue discussions in the meantime, and Biden said that while he was “considering” the use of the 14th amendment to circumvent Congress and nix the debt ceiling altogether, he noted that the tactic would have to be litigated and couldn’t take place until “months down the road.” (Politico)
• Leaders of the Treasury Borrowing Advisory Committee — which include Goldman Sachs Group Inc. executives Beth Hammack and Ashok Varadhan and former JPMorgan Chase & Co. Chief Operating Officer Matt Zames — sent a letter to Treasury Secretary Janet Yellen, calling the potential for a U.S. debt default “unthinkable,” adding that the “magnitude of adverse consequences from a prolonged negotiation, or a default, is unquantifiable.” The TBAC, which advises the Treasury Department on borrowing, argued for either new requirements that raise the debt limit simultaneously with appropriations or a permanent repeal of the debt limit. (Bloomberg)
• New York Fed President John Williams said the central bank would keep a close eye on lending and hiring conditions as it considers the potential for another interest rate hike, noting that interest rate increases take time to have an effect on high inflation and he expects inflation to decline to around 3.25% this year, reaching the Fed’s 2% target over the following two years. Williams’ comments during a speech yesterday left open the possibility of further rate increases, but he noted during a Q&A session that the Fed has opted not to provide signals about its next rate moves. (The Wall Street Journal)
• Former Coinbase Global Inc. employee Ishan Wahi was sentenced to two years in prison by a New York federal court in the first-ever insider-trading case involving cryptocurrency. Wahi pleaded guilty to charges that he tipped off his brother and a friend to information about the exchange over a 10-month period, which the pair then used to trade tokens and rake in almost $1.5 million in profits. (The Wall Street Journal)

Worth watching:

• Commissioner Hester Peirce of the Securities and Exchange Commission will speak at the Financial Times’ Crypto and Digital Assets Summit.

US Default Insurance Cost Eclipses Brazil, Mexico as X-Day Nears

Bloomberg

Yellen heads to G7 with debt ceiling, bank crisis and tax woes in tow

Andrea Shalal and David Lawder, Reuters

Treasury Secretary Janet Yellen lands at Japan’s G7 finance meeting this week, with her ambitious economic agenda hijacked by a bitter partisan fight over the U.S. debt ceiling that threatens a new financial crisis, and a signature tax deal blocked by Republicans.

Funding woes at the Education Dept. threaten federal student aid agenda

Danielle Douglas-Gabriel, The Washington Post

After Congress refused to give more money to the federal student aid office last year, higher education experts warned of potential disruption to efforts by the Biden administration and lawmakers aiming to help student loan borrowers and others paying for college. Now experts say those worries are coming to pass.

Factbox: U.S. corporate bankruptcies at highest level since 2010

Bansari Mayur Kamdar, Reuters

U.S. companies are feeling the heat of decades-high interest rates and sticky inflation, with several filing for bankruptcy protection as the era of easy money draws to a close. The tally of U.S. companies that have gone bankrupt so far in 2023 is higher than the first four months of any year since 2010, data from S&P Global Market Intelligence showed.

A woman in Texas worked 4 jobs — but still couldn’t keep up with her $250K in student debt. Here is the advice she got from a famous finance YouTuber

Bethan Moorcraft, Yahoo Finance

Teryca Brooks-Long was desperate. Despite working four different jobs, she had racked up nearly $250,000 in student debt and was only sinking further into the red. Unable to keep her head above water, she called on personal finance YouTuber Caleb Hammer for help.

Here’s who misses checks if the U.S. hits the debt brink in June

Caitlin Emma, Politico

In the event of a default, the Treasury Department would have to figure out how to keep paying out tens of billions of dollars in Social Security benefits, federal salaries and more.

What Happens to Social Security Benefits if the U.S. Hits the Debt Limit?

Anne Tergesen, The Wall Street Journal

A disruption of benefits would strain the budgets of many of the 66 million Americans who get Social Security.

For families that rely on federal assistance, the debt ceiling crisis creates worrisome uncertainty

Kayla Tausche and Molly Roecker, NBC News

If a deal can’t be reached by June 1, families that rely on federal payments worry that their checks will stop arriving.

Biden hits the road to pressure GOP amid imperiled debt ceiling talks

Tony Romm, The Washington Post

The president aims to make the case for a swift increase in the debt limit a day after meeting with congressional leaders, including House Speaker Kevin McCarthy, who described the talks as lacking ‘movement’

‘Stop Printing Money.’ How Voters Would Solve the Debt-Ceiling Standoff

Annie Linskey and Aaron Zitner, The Wall Street Journal

John Houck, a 63-year-old Republican who lives near Phoenix, doesn’t want the U.S. to ruin its credit by failing to pay its bills. But he worries that cutting the military could threaten border security, and that reductions to Medicare and Social Security amount to an unkept promise to Americans who paid into those systems.

How Might the Government Avoid Default? Biden Offers Clues.

Jim Tankersley, The New York Times

After making little progress with Republican leaders at the White House on Tuesday, the president previewed two possible endgames to resolve a debt-limit standoff.

The Coin, the Constitution, Premium Bonds: The Debt Limit Workarounds

Jeanna Smialek, The New York Times

As Congress hurtles toward a debt limit showdown, ways to work around it are garnering attention.

Americans likely saw little relief from inflation in April

Christopher Rugaber, The Associated Press

After steadily declining for nearly a year, consumer price data to be released Wednesday will likely show that U.S. inflation remained stubbornly high in April, a sign that it might be entering a newer, stickier phase. Consumer prices are forecast to have risen 0.4% from March to April, much faster than the 0.1% increase the previous month, according to a survey of economists by the data provider FactSet.

Online Prices in the US Fall for Eighth Consecutive Month in Adobe Data

Alexandre Tanzi, Bloomberg

Online prices fell for the eighth straight month from a year earlier, with declines for appliances and electronics. Prices of goods sold online fell 1.8% in April from the previous year and declined 0.7% from March, according to data from Adobe Inc. released Tuesday.

Goldman’s Marcus Hikes Yield to 4.15%, Matching New Apple Product

Claire Ballentine, Bloomberg

The boost to Marcus’s high-yield savings product comes after the Fed hiked rates for what’s likely the last time in this cycle.

Capital One returns fire at Walmart as credit card deal sours

Kevin Wack, American Banker

The battle between Walmart and its exclusive credit card issuer is heating up, with Capital One Financial alleging that the retail giant failed to meet its marketing obligations because it was unhappy with the economic terms of the partnership. In a new court filing, Capital One also accuses Walmart of trying to abandon a long-term deal the two companies struck back in 2018 because the retail chain wants to move its credit card business to a fintech joint venture in which it has a controlling interest.

US banks generated record $80bn first-quarter profits despite turmoil

Stephen Gandel, Financial Times

Lenders benefited from higher interest rates, low loan defaults and an expanding jobs market

Investors Bet on Defeating FDIC Claim to $2 Billion SVB Financial Deposit

Soma Biswas, Wall Street Journal Pro

The Federal Deposit Insurance Corp. says it has no obligation to return SVB Financial’s deposit at its now-defunct banking unit.

Senate Democrats press bank CEOs on late fees

Claire Williams, American Banker

A group of Senate Democrats asked several banks to explain their policies regarding customer late fees.

Corporate contributions could be a thing of the past

Rob Kozlowski, Pensions & Investments

U.S. corporations are continuing to lower their expected contributions to their pension plans in 2023 as more and more plans reach full funded status. The companies behind the 100 largest corporate pension funds plan to contribute a total of up to $12.5 billion in 2023, according to Pensions & Investments’ analysis, compared to $16.2 billion contributed in 2022.

Barclays Analysts Hit by Bias Claim in Report About Controversial Pipeline

Alastair Marsh, Bloomberg

A group of nonprofits is pushing Barclays Plc to retract an analyst research note they claim amounts to a “whitewash” of the environmental and social impact of an African oil pipeline being developed by companies including TotalEnergies SE.

Mortgage credit availability falls to lowest level in decade

Adam Barnes, The Hill

Mortgage credit availability fell to its lowest level in a decade as lending tightened amid ongoing instability in the banking sector, according to data released Tuesday by the Mortgage Bankers Association (MBA).

Home Prices Fell in Third of the U.S. During First Quarter

Nicole Friedman, The Wall Street Journal

Home prices fell in more parts of the U.S. than they have in over a decade during the first quarter, when nearly a third of metro areas posted annual price declines, the National Association of Realtors said Tuesday.

The Home Buyer’s Quandary: Nobody’s Selling

Nicole Friedman, The Wall Street Journal

Many are ready to move but don’t want to lose the low-rate mortgages they locked in a few years ago, crimping the supply of homes and keeping prices high.

Binance prefers UK to US for crypto regulation

Nikou Asgari and Scott Chipolina, Financial Times

Binance, the world’s largest crypto exchange, has said it is a “very difficult time” to do business in the US, amid a crackdown on digital assets by regulators. Chief strategy officer Patrick Hillmann said the US “has been very confusing over the last six months”.

Central bank digital coin would be more useful than cash, but cash likely to remain

Chris Gaetano, Accounting Today

Cash may no longer be king, but it’s probably never going to leave the kingdom. This was, effectively, the conclusion of a paper from the National Bureau of Economic Research, which develops and analyzes a model highlighting the tradeoffs between physical cash and a Central Bank Digital Coin.

Crypto Companies Test the Public Markets

Vicky Ge Huang, The Wall Street Journal

Bitdeer recently went public via a SPAC, and Chia Network is exploring an IPO.

SEC Blasted on Custody Proposal by JPMorgan, Crypto Firms and a Fellow Agency

Jesse Hamilton, CoinDesk

The U.S. securities regulator recently proposed requiring investment advisers to keep customers’ crypto assets with “qualified custodians” and is now facing wide criticism for the potential future rule.

Jane Street, Jump Pull Back Crypto Trading Over US Regulatory Uncertainty

Katherine Doherty and Yueqi Yang, Bloomberg

Jane Street Group and Jump Crypto — two of the world’s top market-making firms — are pulling back from trading digital assets in the US as regulators crack down on the industry. Jane Street is going even further by scaling back its crypto ambitions globally because regulatory uncertainty has made it difficult for the firm to operate the business in a way that meets internal standards, according to a person familiar with the matter.

Miami’s Love Affair With Crypto Is Souring as Bitcoin Faithful Flock to the City

Deborah Acosta, The Wall Street Journal

On the eve of the annual bitcoin conference, the city and its mayor have mostly moved on from crypto.

Briton Admits to Twitter Hack That Hijacked Celebrity Accounts

Margi Murphy, Bloomberg

A British man has admitted to his involvement in one of the most high-profile social media hacks, a plot that included the hijacking of top US political and business leaders’ Twitter accounts.