5 Things You Need to Know to Start Your Day

US debt ceiling debate continues, banks and regulators play chicken over First Republic bailout, and quants spur Treasury gains. — Liza Tetl [View in browser]( [Bloomberg]( US debt ceiling debate continues, banks and regulators play chicken over First Republic bailout, and quants spur Treasury gains. — [Liza Tetley]( Debt ceiling Speaker [Kevin McCarthy just managed to get his debt bill through the House]( on Wednesday, intensifying the pressure on President Joe Biden to open talks with Republicans over raising the debt ceiling, as a US payment default looms this summer. The plan would increase the debt limit by $1.5 trillion, which would stave off a US default until March 31, 2024 at the latest. But Biden is taking a hardline stance against the plan, saying the debt ceiling is “not negotiable.” The bill, which narrowly passed by 217 to 215, has no chance of passing the Democratic-controlled Senate. “The president can no longer ignore by not negotiating,” McCarthy said. Bank standoff The First Republic Bank saga continues, with the situation increasingly looking like a[game of chicken between the US government and the lender’s largest rivals](. Regulators have refrained from stepping in so far, even after the stock plummeted on Tuesday and Wednesday, in hope that the depositor banks will hash out a deal with the troubled lender to ensure it doesn’t collapse and lose their money. But big bank executives are keen to avoid throwing good money after bad, expecting that if they wait to see how it plays out, they may get some cash back. Treasury gains Quant investors appear to be [fueling gains in US Treasuries this week,]( concentrated around the belly of the curve, and Citigroup analysts say the short-term buying strategy may have further to go. A two-day US bond rally saw yields on five-year notes down the most in a month on Tuesday, driven by an increase of approximately 92,000 contracts. The boost for sovereign debt this week has also been driven more generally by traders rushing toward safer assets amid lingering concerns about the health of US regional banks. Futures bounce It’s another positive day for US stock futures, with contracts on the tech-heavy Nasdaq up 0.8% as at 5:12 a.m. in New York after Facebook parent Meta posted a sales beat, adding to other strong results in big tech this week. S&P 500 futures are up 0.5%. After a good week, Treasury yields are rising slightly, and a measure of the dollar continues to weaken on recession fears. Gold prices rise, with most other metals also up. Oil continues to advance. Coming up… Today we’ve got first quarter GDP data at 2:30 p.m. along with personal consumption figures and core PCE. At 4:00 p.m. we’ll get US pending home sales data for March. And there’s more coming on the earnings front, including Amazon, Caterpillar, Comcast, Eli Lilly, Hasbro, Intel, T-Mobile, Southwest Airlines, Seagen, Mastercard, Roper Technologies, Mondelez, Merck & Co. and Intel. What we’ve been reading Here’s what caught our eye over the past 24 hours: - Biden’s [Made in America policies]( spark rivalry across the globe - [Meta’s surprise rebound]( in digital ad sales gives it scope to pour money into AI - [Long term sickness is costing the UK economy]( £43 billion a year - UniCredit redeems an AT1 bond in[first test since wipeout of Credit Suisse](bbg://news/stories/RTRGYLDWLU68) notes - [Deutsche Bank prepares to slash 800 senior]( back office staff in cost cutting push - There’s [infighting at the Fed]( over the need to cool wage inflation - What’s next for [New York after officials failed to address the housing](bbg://news/stories/RTRNQZTP3SHS) crisis? And finally, here’s what Joe’s interested in this morning... Talk of "the end of dollar dominance" is everywhere these days. So now we're contributing to the discourse with [today's Odd Lots episode](, with fund manager [Paul McNamara]( on the very subject. Of course talking about the decline of the dollar isn't just popular now. People have been talking about it for years and years. The conversation changes flavors from one moment to the next. But it really is omnipresent. And so it's easy to dismiss it all as basically just being noise. We've heard it all before. That being said, in my mind I can think of a few reasons to not just dismiss it all outright: - It's not just cranks talking about this. There's always sundry doomers out there, cheering on the end of the dollar, with their forecasts of imminent hyperinflation or whatever. But if folks like Paul are taking the conversation seriously (and his view is that there is a global impulse to de-dollarize, but doing so is much easier said than done), then that alone is a good reason to not just wave it all away.  - Generally speaking, so far everything about the 2020s is the opposite of the 2010s. This is a longstanding view of mine. Last decade was high unemployment and low inflation. This time its low unemployment and high inflation. Last decade, tech was the first industry to boom. These days, tech has led the way on layoffs. Last decade, there was all this angst about Too Big To Fail banks. These days the anxiety is about smaller, community banks. The list goes on. But anyway, there were a lot of dollar naysayers in the wake of the Great Financial Crisis and the right move was to fade them. So if you just go by the "it's the opposite" view, then maybe the move is to take them seriously.  - The US is increasingly looking inward. To my mind, one of the biggest shifts is not necessarily that the world is looking at the US differently, but that the US is looking at the rest of the world differently. One factor behind the dollar's dominance (there are several) is that the US is the world's consumer of last resort. But maybe the US doesn't want to be that anymore. And between Trump and then Biden's efforts on chips and energy tech, there’s a US-led shift away from the world (how far it goes is tbd). As Paul notes in the episode, part of what's going on right now is that the BRICS nations are serious about getting away from the dollar. But this is partly also a US politics story. And so while the conversation has a bit of a "flavor of the month" vibe to it, there are some reasons to engage it seriously. Check out Paul's episode on [Apple](, [Spotify]( or elsewhere. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart](. Follow Us Like getting this newsletter? 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