How would you answer these students discussions:

1. This article summarizes the recent agreement upon raising the debt ceiling, and what budget cuts will take place moving forward. The debt cap is now set at $31.4 trillion. Some of the cuts include law enforcement, forest management, and federal funding for scientific research. This could have a negative effect on research corporations such as Exxon, General Electric, Chevron, and a number of others that receive substantial funding to back their research operations towards global solutions, such as fuel and energy efficiency. The military budget would increase to $886 billion next year, which could boost market performance in companies like Lockheed Martin. Boeing, and Raytheon. A substantial amount of the cuts come from raising the requirements for families to receive temporary federal aid, such as food stamps and healthcare. The $80 billion granted to the I.R.S. for employee hiring will also be rescinded from the agreement. The overall sentiment of less government spending may or may not effect the direction of markets in entirety, however can lower investor confidence in the sectors in which the cuts are being implemented.

Link: https://www.nytimes.com/2023/05/29/us/politics/debt-ceiling-agreement.htmlLinks to an external site.

2. https://www.cnn.com/2023/06/02/investing/treasury-debt-ceiling-deal/index.htmlLinks to an external site.

This article explains that the Senate has passed the bill that suspends the nations debt ceiling to January 1st, 2025. This is because the Treasury has struggled to pay its bills on time and now they finally have the time needs to get more money and start to pay off this debt. If this does not pass through the house then it will result in catastrophic economic state. This debt ceiling has a major affect on almost every aspect of corporate finances and the economy including interest rates, mortgage rates, stocks, and credits.