Now that the Senate has signed off on the US’s new debt ceiling and a government default has been averted, a huge uncertainty has been removed from global markets.

In the US, debate is shifting from budgets back to the core obsession of what the Federal Reserve will do when the American central bank next meets on June 13-14.

US labour market data showing wage growth in May moderating, as an unexpectedly large 339,000 jobs were added to the workforce, will be a key indicator for rate-setters. Fears about US core inflation, at 5.5 per cent (lower than Britain at 6.8 per cent), have led to indications from the Fed that there may not be any pause on interest rate hikes.

But views among members of the Fed’s open market committee, which makes rate decisions, are shifting. The president of the Philadelphia Fed, Patrick Harker, suggests the rush to higher rates should be cooled.

Here, the Bank of England has been given carte blanche by Chancellor Jeremy Hunt to raise interest rates even if it plunges the UK into a recession.

That may let Governor Andrew Bailey and the nodding dogs on the interest rate-setting monetary policy committee off the hook about the next decision.

If Bailey really believes that excessive growth in the money supply has not been a factor in the UK’s stubborn cost of living crisis, it makes little sense to keep raising borrowing costs. The upward shift in market interest rates, together with the rise since the last official inflation data, is already having a nefarious impact.

Favourable fixed-rate mortgage deals have come off the table. The Nationwide garnered attention after it reported that house prices are 3.4 per cent lower than in May 2022.

Its data has to be carefully interpreted, as the index is based only on its own customers and excludes buy-to-let.

In any case, it shouldn’t be a cause for panic. If prices are coming down, that could put housing in better reach of those excluded from home ownership.

It is hard to imagine why the Chancellor should think a UK recession is acceptable.

Less than two weeks ago, he stood next to the International Monetary Fund’s managing director Kristalina Georgieva celebrating the fact that the UK’s output projection for this year had been upgraded.

A possible explanation is concern among officials that prices are not coming down fast enough to meet Rishi Sunak’s target of halving inflation this year.

Moreover, he doesn’t want his Treasury to be tarnished by the same kind of gilts market tantrum faced by Liz Truss.

Monetary policy works slowly.

One cannot underestimate the impact of the rise in the bank rate from 0.1 per cent to 4.5 per cent on every aspect of the economy, from ordinary households to debt-laden businesses and the residential and real estate.

The fear must be that central banks, having misjudged prices on the way up, are now missing the time lags in the system.

The Office for National Statistics reports that the average gas price is 48 per cent lower this week than the same week last year and 87 per cent off the peak of August 2022.

The UN says global food prices are 22 per cent below the peak of March 2022.

Bailey and the Bank need to wake up, smell the coffee and hit the pause button on interest rates.

Pet hate

The private equity assault on London-listed companies shows no sign of abating in spite of the surging cost of debt.

The future of veterinary vaccines group Dechra is in danger after it agreed to a discounted £4.5billion buyout by Swedish predator EQT.

Instead of standing up for the independence of life sciences, chairman Alison Platt put down the welcome mat, declaring it ‘a compelling opportunity for shareholders’.

Selling an animal vaccine group, when pet suppliers and veterinary practices are booming, is absurd.

Under private equity control, jobs are axed behind closed doors, research budgets slashed and, as Asda and Morrisons have learned, servicing debt can become a burden which stymies investment.

Incentives for executives to sell are immense, with chief executive Ian Page set to fill his boots.

The Dechra deal flies in the face of the public interest, with command and control over Britain’s sciences industries denuded and the corporation tax base diluted.

This is no more than a shabby betrayal of UK plc.

President Joe Biden appeared to completely zone out after he was asked by a reporter what his wife Dr. Jill Biden thought of his intention to run for the presidency once again in 2024.

‘I have not made that formal decision but it’s my intention… my intention to run again. And we have time to make that decision’, the president began.  

‘Dr. Biden is for it?’ the MSNBC interviewer asks – only to be met with silence.  

‘Mr. President?’ the reporter prods, to virtually no reaction from Biden.  

‘Dr. Biden thinks that uh, my wife thinks that uh, that I uh, that, that we’re, that we’re doing something very important,’ Biden finally states, while managing to avoid directly answering the question. 

Biden’s response led to a barrage of criticism on social media.

‘One must feel sorry for him. But no way should he be working any job much less POTUS,’ wrote one user.

‘I feel like I am watching my Dad talk about my Mom who passed away 6 years ago. This is not funny. This is real,’ added another. 

‘Imagine how low his approval would be if the media didn’t protect him with note cards, and pre selected questions. It’s madness,’ suggested another Twitter follower.

On Friday night, Missouri federal appeals court blocked the Biden administration’s plan to forgive hundreds of billions of dollars of federal student loan debt, saying they needed more time to rule on an emergency request by Republican-led states to block the policy.

The Biden administration had previously said in court filings it could begin canceling student loans as early as this Sunday, but their plan was challenged by six states. 

The plan, announced in August, was designed for people who had taken out loans to pay for college: Friday’s decision delays distribution of up to $20,000 in debt relief for more than 40 million eligible borrowers.

About 22 million people have already applied for debt relief since the application opened on October 14. 

The states which challenged included Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.

The appeals court gave the administration until Monday to respond to that request, and the states will have until Tuesday to reply to that response. 

Before the Missouri court’s decision was announced, Biden spoke about the scheme at Delaware State University, a historically black university where the majority of students receive federal Pell Grants.

The president highlighted the ease of the application, which doesn’t require users to upload any forms or to create an account.

‘Folks, it takes less than 5 minutes,’ Biden said. 

He said the ‘vast majority’ of applicants are able to submit for relief from their phones.

It’s unclear what the appeals court decision means for the 22 million borrowers who already applied for the relief. 

The Biden administration had promised not to clear any debt before October 23 as it battled the legal challenges, but the soonest it was expected to begin erasing debt was mid-November.

The president’s performance on his MSNBC interview will likely do little to lift his approval rating which remains deep underwater in Iowa, where only 20 percent of people believe the country is headed in the right direction, according to a new poll.

With only 18 days until Democrats have to defend control of the House and the Senate, it spells more bad news for Biden in a state with several crucial races.

The Des Moines Register/Mediacom Iowa Poll found that 61 percent of Iowa adults said they disapproved of Biden’s presidency, while 35 percent approve. 

The numbers are miserable but actually show a small upturn since July when only 27 percent approved. 

At the same time 73 percent of adults polled said they believed the nation is on the wrong track, compared with 20 percent who say the nation is going in the right direction. 

It comes as Democrats and Republicans launch their final push before next months midterm elections, and with signs that key races up and down the country are tightening.

Democrats have been brought back down to earth after a number of legislative victories and positive economic numbers saw their poll ratings improve before giving way to fresh gas price rises, and warnings of a winter COVID surge.

Biden himself has generally steered away from campaign events with candidates, instead choosing to make official speeches – on the economy or on drug prices – in states with important races.

In Iowa, Republicans are hoping to pick up the seat of Democratic Rep. Cindy Axne.

But Republican Sen. Chuck Grassley is under pressure to hold his seat from the challenge of Mike Franken, who has closed to within three points, according to recent polls. 

Poll respondents identified a range of key issues, with the economy coming top of the list.

Joseph Dehner, a 42-year-old political independent living in West Des Moines, said he supply chain shortages, inflation and staff shortages were making it difficult to keep his business going.

‘Everything’s so expensive not only for the business and trying to get supplies and stuff because of supply chain problems, but having enough money at the end of the day for not only my family, but my employees’ families,’ he told the pollsters, according to the Des Moines Register.

For now, Democrats remain slight favorites to hold on to the Senate, according to the latest forecast by the political website FiveThirtyEight. However, it says their advantage has weakened since September.

At the same time, the site’s model says Republicans are firm favorites to take back the House, with Iowa’s third Congressional district one of the key contests.

Earlier this week another poll found that just one-third of American voters would send President Joe Biden back to the White House if the 2024 election were held today.

A majority of Americans also believe their lives are worse off than they were two years ago, the poll found. 

The new survey by Fox News was taken from October 9 through 12, less than a month until Election Day 2022 when voters will decide which party controls Congress for the latter half of Biden’s term.

While a 54-percent majority said they want someone other than Biden to run for president, Democrats do have a slight edge over Republicans on the generic Congressional ballot.

Forty-four percent of registered voters said they preferred the left to the right for their Congressional votes while 41 percent said the opposite. 

However, Republicans have a one-point edge among people who ‘feel certain to vote,’ according to the survey.

Biden’s re-electability still remains fairly high among Democrats, with 71 percent backing him in a hypothetical current-day re-election bid.