By Andrea Shalal

LARGO, Maryland (Reuters) -President Joe Biden vowed on Thursday to get U.S. gasoline prices down, one day after a report showed consumer inflation surged by the most in 14 months due to higher energy costs.

KEY QUOTE

“I’m going to get those gas prices down again, I promise you,” Biden told an audience in Largo, Maryland, during a speech on the economy.

THE TAKE

The comments come as Biden, a Democrat seeking reelection in 2024, faces voter frustration over the economy despite its continued growth during his four-year term in office as inflation hits consumer pocketbooks.

Consumer prices rose 3.7% over the last year, though the rate of inflation has slowed in recent months.

BY THE NUMBERS

U.S. gas prices average $3.85 per gallon of regular gasoline, up from $3.70 per gallon last year, according to the AAA motorist group.

CONTEXT

* Biden did not elaborate on steps he would take, but the U.S. Energy Department has talked to oil producers and refiners to ensure stable fuel supplies, a top Biden economic adviser said on Wednesday.

* Gasoline prices jumped 10.6% in August after climbing 0.2% in July, accounting for more than half the increase in the Consumer Price Index.

* Biden previously authorized large withdrawals from the United States’ Strategic Petroleum Reserve to combat high prices, leaving it at its lowest level in decades. Tapping it again this year would be seen as a risky move.

(Reporting by Andrea Shalal and Jarrett Renshaw; Writing by Trevor Hunnicutt; Editing by Leslie Adler and Jonathan Oatis)

By David Shepardson

(Reuters) -General Motors said Thursday it hiked its contract offer to a 20% wage hike for U.S. autoworkers – including 10% in the first year – in a bid to avoid a strike that is set to begin at 11:59 p.m. if no deal is reached.

The targeted actions against selected auto plants would be the United Auto Workers’ first-ever simultaneous strike against the Detroit Three carmakers. Ford Motor also confirmed it had earlier offered a 20% hike and other benefits.

“We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight,” GM CEO Mary Barra told employees of its proposal for the 4 1/2 year labor deal. “Remember: we had a strike in 2019 and nobody won.”

GM reported a $3.6 billion pre-tax loss in 2019 after the 42-day walkout.

Coordinated strikes would represent arguably the most ambitious U.S. labor action in decades and could impact U.S. economic growth, depending on how long they last. A Ford executive told reporters the odds of a strike are very high after it received no counterproposal to its offer from Tuesday.

The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.

UAW President Shawn Fain said automakers had rejected the pension, 32-hour work week and other benefit improvements sought. He also criticized proposed changes to profit sharing that would cut payments to workers.

Automakers say the UAW demands are unaffordable and not realistic.

Ford told reporters if the UAW demands had been in effect it would have lost $14.4 billion over the last four years rather than the nearly $30 billion in profits it recorded.

The UAW has outlined plans for a series of strikes targeting individual, undisclosed U.S. auto plants if agreements are not reached by late Thursday, rather than a full walkout.

UAW organizing director Brian O. Shepherd said in an online event Thursday that the strike strategy is to give “negotiators maximum flexibility” to get autoworkers “the contract they deserve.” He added a full walkout “is still on the table.”

Fain said Wednesday that the pay raises offered by the Detroit Three to 146,000 U.S. auto workers were inadequate even as automakers said the union had yet to formally respond to their latest, more generous offers. The union is asking for 40% raises and major improvements in benefits.

Chrysler parent Stellantis had offered an increase of 17.5%, Fain said Wednesday.

Ford said Thursday it was still waiting for a UAW counteroffer, warning that “the future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome.”

AID FOR SUPPLIERS

The U.S. auto sector, including parts manufacturers, employs almost 1 million people, according to the U.S. Bureau of Labor Statistics.

Biden administration officials are discussing emergency aid to protect smaller firms that supply U.S. auto manufacturers, according to a source with knowledge of the matter. The White House declined to comment.

Ford CEO Jim Farley said in a letter to employees seen by Reuters, that “bargaining is a two-way street and we continue to implore the UAW to stay at the table, work together to reach an agreement, and avert a strike.”

Fain outlined a strategy to “create confusion” with a series of work stoppages targeting individual U.S. plants if no deal is reached.

Stopping work at a key engine or transmission plant, for example, could have a cascading effect by depriving other factories of parts they need to produce vehicles. Another option would be to strike at profitable pickup truck or SUV assembly plants.

Fain said it was still possible that at a later date all of the auto workers could strike.

A full strike would hit earnings at each affected automaker by about $400 million to $500 million per week assuming all production was lost, Deutsche Bank has estimated.

Some losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months. A UAW strike would not affect so-called transplant carmakers like Toyota, Honda and Mercedes, whose U.S. plant workers are not represented by the union.

U.S. President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future,” White House economic adviser Jared Bernstein said Wednesday.

“These workers are again at the forefront of their industry, and they’re not getting paid like it,” said Senator Sherrod Brown, a Democrat from Ohio, a state with thousands of auto industry workers, on the Senate floor Thursday.

The UAW said it was planning a rally in Detroit on Friday that will include Fain, Senator Bernie Sanders and other members of Congress, coinciding with a first of day of expected walkouts.

(Reporting by David Shepardson; additional reporting by Nandita Bose in Washington and Ben Klayman in Detroit Editing by Peter Henderson, Jamie Freed, Nick Zieminski and Deepa Babington)

By Noel Randewich and Ankika Biswas

(Reuters) -The S&P 500 ended higher on Thursday as hotter-than-expected economic data eased worries about a recession without raising fears of a Federal Reserve rate hike next week, while Arm Holdings soared in its stock market debut.

SoftBank’s Arm was valued at nearly $60 billion in a strong Nasdaq debut, with the chip designer’s shares soaring nearly 25% in their first day of trading.

Retail sales rose more than expected in August on higher gasoline prices, while initial claims for state unemployment benefits climbed to a seasonally adjusted 220,000 for the week ended Sept. 9 from 217,000 the week before.

Monthly producer prices for final demand rose 0.7% last month, against expectations of a 0.4% increase. On an annual basis, they increased 1.6% compared with estimates of a 1.2% rise.

“Today’s economic data confirms the path toward a soft landing, but without being so hot that the Fed thinks they might need to do a couple more rate hikes,” said Ross Mayfield, Investment Strategy Analyst at Baird. “All together, it’s pretty bullish.”

Chip designer Arm’s American Depositary Shares opened at $56.1 apiece compared with the initial public offering price of $51, in a sign of confidence for other companies planning to list their shares.

“The game is back on. Capital markets are open for business,” said Thomas Hayes, chairman at Great Hill Capital LLC. “You’re going to see so many IPOs in the next 12 weeks your head is going to spin.”

Traders see a 97% chance of the Federal Reserve holding rates steady in its Sept. 20 policy meeting and a near 67% likelihood of a further pause in November, according to the CME FedWatch Tool.

Citigroup expects the Fed to hike interest rates by 25 basis points in November, compared with its previous forecast of a September hike.

The S&P 500 climbed 0.84% to end the session at 4,505.17 points.

The Nasdaq gained 0.81% to 13,926.05 points, while the Dow Jones Industrial Average rose 0.96% to 34,907.51 points. It was the Dow’s biggest daily percentage gain since Aug. 7.

Volume on U.S. exchanges was 10.0 billion shares traded, compared to an average of 9.9 billion shares over the previous 20 sessions.

HP fell 1.8% after Warren Buffett’s Berkshire Hathaway sold about 5.5 million shares of the company.

Visa slipped over 2% after the payment processing giant said it was engaging with Class B shareholders on a proposal to convert their shares to Class C or Class A.

Moderna rose 3.9% after a European regulator’s advisory panel recommended authorizing an updated COVID-19 vaccine from the company.

With Thursday’s rally, the S&P 500 is up about 17% so far in 2023, and the Nasdaq is up about 33% over the same period.

Advancing issues outnumbered falling ones within the S&P 500 by a 6.5-to-one ratio.

The S&P 500 posted 12 new highs and 5 new lows; the Nasdaq recorded 37 new highs and 169 new lows.

(Reporting by Ankika Biswas, Shristi Achar A and Medha Singh in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb Chakrabarty, Vinay Dwivedi and David Gregorio)

Defiance ETFs Launches ETF that Taps Zero-Day-to-Expiration Craze

The insatiable demand for products that offer reliable income is forcing investment firms to come up with unique products to tap into the emerging market opportunity. Defiance ETF is the latest to jump into the growing demand for the so-called zero-day-to-expiration contract with the launch of ultra-short-dated options.

Defiance Option ETF

The investment fund plans to write contracts on the Nasdaq 100 that will protect investors from the index decline. According to the issuer, the Defiance NASDAQ 100 Enhanced Options Income ETF will be able to sell contracts more frequently. The ETF is to hold cash and short-term treasuries as collateral for the investments.

The new ETF product essentially amounts to a bullish bet on the Nasdaq 100, targeting investors who believe the Index will continue edging higher. Whenever the Index rises, the ETF will lock in a premium plus any extra amount linked to the time value of the contracts sold in the money.

On the other hand, whenever the Index drops below the strike price of a put placed, the buyer of the option could demand the price difference between the threshold and the index level. If the difference is more than the premium received, the ETF will incur a loss.

The ETF product will bet on the equity rally that is showing no signs of slowing down even as the Federal Reserve embarks on aggressive monetary policy tightening. Consequently, demand for derivative-selling exchange-traded funds has skyrocketed to record highs as the market continues to edge higher.

Nevertheless, given their ever-growing risk to market stability, the ever-growing demand for ODTEs continues to arouse concerns in some quarters. The option products bet on market calm and pose significant risks whenever volatility increases significantly.

Alternative Income Products Demand

Defiance joins a growing list of firms that are shrugging the concerns, opting to take advantage of the growing demand for ODTEs. ProShares has already filed to start offering ETFs leveraging option contracts. It is now a matter of time before other ETFs also incorporate them into a fund.

Many firms are increasingly racing against time to offer options products buoyed by the amount of success that JPMorgan has enjoyed with its JPMorgan Equity Premium Income ETF (JEPI). At the height of the bear market run in 2022, when the S&P 500 fell by about 19%, the fund outperformed by 15 percentage points. The fund has also amassed over $30 billion in assets over the past three years, with money flowing despite recent struggles in the recent past.

Impressed by the growing demand for options-selling products, Defiance has confirmed plans to diversify in the industry with the launch of Defiance S&P 500 Enhanced Options Income ETF (JEPY) and the Defiance R2000 Enhanced Options Income ETF (IWMY). The two option products will be focused on the S&P 500 and the Russell 2000 indexes.

According to Defiance co-founder and Chief investment officer Sylvia Jablonski, retail and institutional investors continue showing strong interest in alternative income products. This is the drive behind the launch of more option-linked ETF products to enhance the income outcomes.

By Dawn Chmielewski

(Reuters) -Walt Disney Co has held exploratory discussions about selling its U.S. TV network ABC to regional TV station operator Nexstar Media Group Inc, people familiar with the matter said on Thursday.

The discussions come after Disney CEO Bob Iger said in July that the company could sell some of its traditional TV assets, which have struggled for years due to the rise of streaming services.

Nexstar’s interest is preliminary and may not lead to any deal, one of the sources said.

Both sources requested anonymity because the matter is confidential. Nexstar and Disney did not immediately respond to requests for comment. Bloomberg News first reported the two companies were in talks about a deal for ABC.

Disney shares rose 1%, while Nexstar stock jumped nearly 6%.

Disney’s ABC comprises a national television network and eight regional stations. It also has affiliation agreements with about 240 local television stations reaching almost all U.S. television households.

Nexstar has 200 owned or partner stations in 116 markets reaching over two-thirds of the U.S. population, as well as national TV networks such as CW and NewsNation. It has a market value of $5.25 billion.

Then Disney Chief Executive Michael Eisner agreed to buy Capital Cities/ABC for $19 billion in 1995.

(Reporting by Dawan Chmielewski in Los AngelesAdditional reporting by Akash Sriram in BengaluruEditing by Josie Kao)

By David Shepardson

(Reuters) -General Motors said Thursday it upped its contract offer to a 20% wage hike for U.S. autoworkers – including 10% in the first year – in a bid to avoid a strike that is set to begin at 11:59 p.m. if no deal is reached.

The targeted actions against selected auto plants would be the United Auto Workers’ first-ever simultaneous strike against the Detroit Three carmakers. Ford Motor also confirmed it had earlier offered a 20% hike and other benefits.

“We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight,” GM CEO Mary Barra told employees of its proposal for the 4 1/2 year labor deal. “Remember: we had a strike in 2019 and nobody won.”

GM reported a $3.6 billion pre-tax loss in 2019 after the 42-day walkout.

Coordinated strikes would represent arguably the most ambitious U.S. labor action in decades and could impact U.S. economic growth, depending how long they last. A Ford official told reporters the odds of a strike are very high after it has received no counterproposal to its offer from Tuesday.

The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.

Fain said automakers had rejected the pension, 32-hour work week and other benefit improvements sought. He also criticized proposed changes to profit sharing that would cut payments to workers.

Automakers say the UAW demands are unaffordable and not realistic.

Ford told reporters if the UAW demands had been in effect it would have lost $14.4 billion over the last four years rather than the nearly $30 billion in profits it recorded.

The UAW has outlined plans for a series of strikes targeting individual, undisclosed U.S. auto plants if agreements are not reached by late Thursday, rather than a full walkout.

UAW organizing director Brian O. Shepherd said in an online event Thursday the strike strategy is to give “negotiators maximum flexibility” to get autoworkers “the contract they deserve.” He added a full walkout “is still on the table.”

UAW President Shawn Fain said Wednesday the Detroit Three had offered 146,000 U.S. auto workers pay raises of as much as 20% blasted the proposal as inadequate even as automakers protested the union had yet to formally respond to their latest, more generous offers. The union is asking for 40% raises and major improvements in benefits.

AID FOR SUPPLIERS

The U.S. auto sector, including parts manufacturers, employs almost 1 million people, according to the U.S. Bureau of Labor Statistics.

The Washington Post reported Thursday Biden administration officials are preparing economic measures to protect auto suppliers that could be impacted, including through government loans. The White House declined to comment on the report.

A source told Reuters aid for suppliers has been discussed “since the minute it became clear there could be a strike” but those talks are “premature and fluid.”

Ford CEO Jim Farley said in a letter to employees seen by Reuters, “bargaining is a two-way street and we continue to implore the UAW to stay at the table, work together to reach an agreement, and avert a strike.”

Fain outlined a strategy to “create confusion” with a series of work stoppages targeting individual U.S. plants if no deal is reached.

Stopping work at a key engine or transmission plant, for example, could have a cascading effect by depriving other factories of parts they need to produce vehicles. Another option would be to strike profitable pickup truck or SUV assembly plants.

Fain said it was still possible that at a later date all of the auto workers could strike.

A full strike would hit earnings at each affected automaker by about $400 million to $500 million per week assuming all production was lost, Deutsche Bank has estimated.

Some losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months. A UAW strike would not affect so-called transplant carmakers like Toyota, Honda and Mercedes, whose U.S. plant workers are not represented by the union.

U.S. President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future,” White House economic adviser Jared Bernstein said Wednesday. A prolonged strike could pose political problems for Biden.

Senator John Fetterman, a Democrat, rejected the idea automakers could not pay more, saying the Detroit Three CEOs made a combined $74 million last year.

Ford Motor has proposed a 20% hike in pay over the contract term. General Motors previously proposed a 18% hike, and Chrysler parent Stellantis 17.5%, Fain said Wednesday. That is less than half the pay hikes the union has sought, but higher than companies’ initial offers. It is not clear what is in the new GM offer.

Ford said Thursday it was still waiting for a UAW counteroffer.

Ford warned of a grim scenario. “The future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome.”

The UAW said it was planning a rally in Detroit on Friday that will include Fain, Senator Bernie Sanders and other members of Congress, coinciding with a first of day of expected walkouts.

(Reporting by David Shepardson; additional reporting by Nandita Bose in Washington and Ben Klayman in Detroit Editing by Peter Henderson, Jamie Freed and Nick Zieminski)

By Arathy Somasekhar

HOUSTON (Reuters) – Crude oil prices above $90 a barrel in the United States stirred worries that inflation could rise further in an economy where the Federal Reserve has already hiked interest rates steeply to control rising prices.

Higher oil prices are a burden on global economies, raising costs for transportation and manufacturing while pressuring consumer spending. President Joe Biden’s administration last week polled oil refiners about operating plans, a sign of concern about gasoline prices and fuel supplies.

U.S. West Texas Intermediate crude (WTI) for October delivery rose 1.9% on Thursday to settle at $90.16, the first close above $90 since Nov. 2022, as traders bet oil supplies would remain tight for the rest of the year.

“The rally in crude will eventually be met with demand destruction,” said Dennis Kissler, senior vice president of trading at BOK Financial. “I’m just not sure if that will be $90 oil or $100 oil that tips the scale.”

Oil prices could reach $100 per barrel by the end of the year, some market participants predict. International Brent crude futures settled at $93.70 a barrel on Thursday, their highest this year. [O/R]

More expensive oil prices are pinching drivers at the pump. U.S. consumer inflation in August increased by the most in 14 months on high fuel costs. Gasoline accounted for more than half of the increase in the Consumer Price Index.

OPEC OUTPUT CUTS

Oil supplies are tightening with top OPEC+ producers Saudi Arabia and Russia extending 1.3 million barrel per day output cuts through year-end. U.S. crude production has also flattened in recent months on a 17% drop in drilling rigs in the last 52 weeks.

Traders are bidding up near-term supplies, a factor likely to reduce U.S. oil inventories as refiners run plants at high levels to meet strong demand for gasoline and diesel.

WTI futures for October delivery traded as much as $9.15 a barrel above crude to be delivered in October 2024. That was the highest premium since November 2022.

Higher prices in the near term prompt traders to sell oil immediately rather than store it.

“There is absolutely no incentive to store oil in a tank,” said John Kilduff, partner at New York-based hedge fund manager Again Capital.

The U.S. consumer and China’s energy demands remain a wild card for oil pricing. U.S. demand has remained strong even as fuel prices rise. China has boosted liquidity to support the country’s economic recovery.

(Reporting by Arathy Somasekhar in Houston; Editing by David Gregorio)

By Joey Roulette

WASHINGTON (Reuters) -NASA on Thursday said it has named a new director of research into what the government calls “unidentified anomalous phenomenon,” or UAP, while the U.S. space agency’s chief said an expert panel that urged deeper fact-finding on the matter found no evidence of an extraterrestrial origin for these objects.

Administrator Bill Nelson made the announcement about the new research chief – without disclosing the person’s identity – after the independent panel of experts recommended in a new report that NASA increase its efforts to gather information on UAP and play a larger role in helping the Pentagon detect them.

UAP are better known to the public as unidentified flying objects, or UFOs.

Nelson during a news conference also gave his personal opinion that life exists beyond Earth.

“There’s a global fascination with UAP. On my travels, one of the first questions I often get is about these sightings. And much of that fascination is due to the unknown nature of it,” Nelson said.

“If you ask me do I believe there’s life in a universe that’s so vast that it’s hard for me to comprehend how big it is, my personal answer is, ‘Yes,’” Nelson added.

But Nelson said the chances that otherworldly beings have visited Earth are low.

The NASA panel, comprising experts in fields ranging from physics to astrobiology, was formed last year and held its first public meeting in June.

“The NASA independent study team did not find any evidence that UAP have an extraterrestrial origin, but we don’t know what these UAP are,” Nelson said, adding that a goal of the agency is to “shift the conversation about UAP from sensationalism to science.”

The U.S. government in the past few years has made several disclosures of information it has gathered regarding a subject that once was met by virtual official silence. It issued a watershed report in 2021 compiled by the Office of the Director of National Intelligence in conjunction with a Navy-led task force encompassing numerous observations – mostly from military personnel – of UAP.

“The mission of NASA is to find out the unknown,” Nelson said.

“Whatever we find, we’re going to tell you,” Nelson added, promising transparency on any discoveries.

The new UAP research director will handle “centralized communications, resources and data analytical capabilities to establish a robust database for the evaluation of future UAP,” NASA said.

Nelson told Reuters he does not know the name of the new director. Dan Evans, a senior research official in NASA’s science unit and a member of the study team, said harassment that other panel members had received from the public during their work was “in part” why the new director’s identity was being kept secret.

‘A VITAL ROLE’

“NASA has a variety of existing and planned Earth- and space-observing assets, together with an extensive archive of historic and current data sets, which should be directly leveraged to understand UAP,” the panel’s report said.

“Although NASA’s fleet of Earth-observing satellites typically lack the spatial resolution to detect relatively small objects such as UAP, their state-of-the-art sensors can be directly utilized to probe the state of the local earth, oceanic and atmospheric conditions that are spatially and temporally coincident with UAPs initially detected via other methods,” the report said.

NASA’s science chief Nicky Fox declined to say how much funding the agency would like to allocate toward the continued UAP-tracking effort.

The 2021 government report included some UAP cases that previously came to light in the Pentagon’s release of video from naval aviators showing enigmatic aircraft off the U.S. East and West Coasts exhibiting speed and maneuverability exceeding known aviation technologies and lacking any visible means of propulsion or flight-control surfaces.

That report said defense and intelligence analysts lacked sufficient data to determine the nature of some of the objects, while some could possibly be explained as atmospheric phenomena, advanced aircraft from another country or innocuous objects such as weather balloons.

The new report called UAP “one of our planet’s greatest mysteries.”

“Observations of objects in our skies that cannot be identified as balloons, aircraft or natural known phenomena have been spotted worldwide, yet there are limited high-quality observations. The nature of science is to explore the unknown, and data is the language scientists use to discover our universe’s secrets,” the report stated.

“Despite numerous accounts and visuals, the absence of consistent, detailed and curated observations means we do not presently have the body of data needed to make definitive, scientific conclusions about UAP,” it added.

(Reporting by Joey Roulette; Editing by Will Dunham)

By David Morgan

WASHINGTON (Reuters) -A visibly frustrated U.S. House Speaker Kevin McCarthy profanely goaded recalcitrant fellow Republicans in a standoff over federal spending, warning that “nobody wins” if the government is forced to shut down.

In a closed-door party meeting on Thursday, McCarthy directly addressed hardline critics who have been threatening to file a “motion to vacate” challenge to his leadership unless spending for the fiscal year beginning Oct. 1 is cut to a level $120 billion lower than McCarthy and Democratic President Joe Biden agreed to in May.

“What Kevin just said right now … to that point: ‘If somebody wants to file a motion to vacate, file the fucking motion to vacate,’ and that’s it. And stop holding up everybody’s work,” Representative Brian Mast told reporters.

Multiple Republican lawmakers described the exchange with McCarthy, who endured a grueling 15 votes to win the speakership in January, agreeing to changes including allowing just one lawmaker to call for a motion to vacate.

McCarthy declined to comment on his remarks.

The California Republican, facing opposition from his most conservative members, said the House of Representatives would remain in session from Monday until lawmakers agree on legislation to keep federal agencies afloat after current funding expires on Sept. 30.

“When we come back, we’re not going to leave. We’re going to get this done. Nobody wins in a government shutdown. Nobody wins in a government shutdown. I’ve been here,” McCarthy told reporters.

McCarthy also said he would not “wait to the last minute” to move a short-term stopgap measure known as a continuing resolution, which would give lawmakers more time to negotiate full-scale appropriations legislation. He stopped short of saying it would emerge next week, but told reporters that such a measure could extend government operations for 30-60 days.

He spoke a day after Republican leaders were forced to pull an $886 billion defense appropriations bill, due to demands from hardline conservatives who refuse to support spending without policy riders on issues such as border security and an assurance that overall spending will be cut to a 2022 level of $1.47 trillion.

While a fight among Republicans on spending was holding up action in the House, the Senate on Thursday in an overwhelming 91-7 vote advanced its first package of spending bills.

Some members of the hardline House Freedom Caucus said they think a shutdown will be necessary to get Republicans to agree to their 2022 target, which is $120 billion below the level that McCarthy agreed to with President Joe Biden in May.

“We’re going to have a shutdown. It’s just a matter of how long,” said Representative Ralph Norman, a prominent Freedom Caucus member.

More moderate Republicans oppose shutting the government down. They believe the House will pass compromise legislation at the $1.59 trillion level set by McCarthy and Biden.

“It’s a mistake to shut down the government,” Representative Don Bacon said. “It’s so shortsighted to be pushing for a shutdown.”

The federal government would enter its fourth shutdown in a decade beginning on Oct. 1 unless the Republican-controlled House and Democratic Senate can pass a long- or short-term funding bill and Biden signs it into law.

Political brinkmanship already has prompted the Fitch rating agency to downgrade U.S. debt to AA+ from its top-notch AAA designation, partly because of repeated down-to-the-wire negotiations that threaten the government’s ability to pay its bills.

(Reporting by David Morgan and Rami Ayyub; Editing by Scott Malone, Mark Porter and Lisa Shumaker)

By Huw Jones

LONDON (Reuters) – This year’s bank turmoil showed some boards and senior management failed in their most basic responsibilities and more regulatory guidance may be needed, a global watchdog said.

A handful of banks with more than $1 trillion in assets, including Credit Suisse and Silicon Valley Bank, either collapsed or were rescued between March and May of this year, sending shockwaves through global markets.

Pablo Hernandez de Cos, chair of the Basel Committee, said on Thursday that the turmoil highlighted many shortcomings. The Basel Committee writes capital rules for banks, determining how much they need to set aside in case they get into difficulty.

“It is of deep concern to see that, in 2023, some banks’ boards and senior management failed in their most elementary responsibilities of overseeing and challenging a bank’s strategy and risk tolerance,” de Cos said in a speech.

“More is clearly needed to shore up such responsibilities.”

The committee is completing a stocktake to see what lessons can be learned, de Cos said.

Most of the banks that failed during the turmoil were not subject to Basel’s standards, said de Cos, who is also governor of the Bank of Spain.

Banking regulators needed to develop a thorough understanding of the viability and sustainability of banks’ business models, he added.

There is broad agreement to prioritise further work to strengthen supervisory effectiveness, including identifying issues that could merit additional global guidance, he said.

There will be further analysis of how bank liquidity rules worked, whether tougher capital rules are needed to cover risks from interest rate moves, how banks deal with large-scale deposit withdrawals, and how capital instruments are written down in a crisis.

Basel may also consider how national regulators decide to exempt a bank with cross-border features from the committee’s standards, de Cos said.

(Reporting by Huw Jones; Editing by Alexander Smith)