THE House of Representatives passed last Wednesday (Apr 26) a bill proposing to raise the US$31.4 trillion borrowing limit, which on one level sounded like good news.

The 217-215 vote – with all the Democrats voting no, and four Republicans opposing – was a victory of sorts for the new House Speaker, Republican Kevin McCarthy from California, whose proposal had faced opposition from some Republicans.

To put it differently, had the vote failed, that would have ignited growing concern in the markets about the ability of the politicians in Washington to avert a US financial default.