We keep getting closer and closer to hitting the debt limit without a workable resolution. So, what can happen? There are several scenarios that could play out here…

The debt ceiling debate is a political brinkmanship that has the potential to cause significant economic damage if the government defaults on its debt. However, both parties have signaled that they are committed to reaching a deal, and markets have calmed somewhat as a result.

The consumer price index (CPI) came in at 4.9% year over year in April, just slightly under the 5.0% reading from March. While this is a positive sign, it is still more than double the Fed's target inflation rate of 2%. The Fed may need to see more evidence of inflation slowing before it pauses its rate hike cycle.