Macro Briefing: 24 April 2023

* High-stakes vote this week on debt ceiling puts House Speaker on hot seat
* Wall Street wakes up to debt-ceiling threat
* Some Democrats in Congress want to restart Biden-McCarthy debt-ceiling talks
* US asks S. Korea not to fill gap in China if Beijing bans chips from Micron
* More countries pushing for lesser reliance on US dollar for trade
* Big tech earnings reports in focus this week
* Hedge funds place huge short bet on Treasuries
* US economic activity picks up in April, according to PMI survey data:

Sharply tighter lending standards in Q4 (inverted in chart below) presumably will spill over into Q1 and beyond, thanks in part to the collapse of Silicon Valley Bank last month. In turn, history suggests the slowdown in loan growth will weigh on the already slowing year-over-year trend in US GDP. “What’s going on nationwide is every one of these banks has either frozen their loan-to-deposit ratio or, more likely, is very intent on shrinking it,” former Dallas Fed President Robert Kaplan said earlier this month. “That is why a lot of small and midsize businesses in this country are getting a phone call saying, politely, ‘At the end of the year, we are not going to be able to give you a loan anymore, or we’re going to reprice your loan.’”

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