At 18:00 GMT it was announced that U.S. President Barack Obama signed the deficit bill that will raise the $14.3 trillion debt ceiling, preventing a default, and will put into place a plan to reduce the U.S. deficit over a period of ten years.
Just before the bill was rushed to the White House for Obama’s signature, a vote was held in the Democratic-led Senate, resulting in a 74-26 vote to approve the deal, just in time before the end of the August 2nd deadline, and ending months of political wrangling and a deadlock in talks in the past few days between Republicans and Democrats.
On late Sunday night debt deal was first voted in the House of Representatives before passing a second vote of approval in the Senate today.
Interest rates on Treasury bills fell after the vote passed in the Senate and the Dollar rebounded from day lows though not significantly as markets expected the deal to be reached by the “eleventh hour”.
The focus now turns to concerns about U.S. economic growth and if its triple AAA will be cut by other ratings agencies, since this afternoon Fitch Ratings said the U.S. can keep its AAA sovereign rating on the expected passage of the $2.1 trillion debt-reduction deal for now.