FirstFT: House Speaker McCarthy faces Republican revolt as US default deadline looms

After reaching a deal on the US debt ceiling with President Joe Biden over the weekend, House Speaker Kevin McCarthy now has to quell a revolt from the Republican party.

McCarthy defended the pact yesterday ahead of a high-stakes vote expected this Wednesday in the lower chamber of Congress, just days before the US is projected to run out of cash to pay all its bills next Monday.

Some rank-and-file Republicans are fuming at the agreement, saying it severely waters down the party’s initial demands. Much of the resistance comes from the staunchly rightwing Freedom Caucus, which includes many lawmakers who opposed McCarthy’s campaign to be Speaker at the start of the year.

Still, McCarthy predicted he would earn the support of enough members of his own party for the agreement, saying “95 per cent” of Republican members were “very excited” about the deal. He also expected the support of some Democrats.

“Maybe it doesn’t do everything for everyone. But this is a step in the right direction that no one thought we would be at today,” McCarthy told Fox News Sunday. “This is a good bill for the American public.”

  • Related: The debt ceiling pact will cement Biden’s reputation for bipartisan dealmaking, but it comes at a cost.

Here’s what I’m keeping tabs on today:

  • Markets closed: Financial markets are closed in the US for Memorial Day, the UK for the spring bank holiday and several other countries across Europe for the Whit Sunday public holiday.

  • Nigeria’s new president: Former Lagos governor Bola Tinubu is inaugurated today after winning disputed polls in February. He faces a bulging in-tray including insecurity and a stagnant economy.

Five more top stories

1. Turkey’s president Recep Tayyip Erdoğan has extended his rule into a third decade after an acrimonious run-off election yesterday, securing about 52.1 per cent of the vote with almost all the counting complete to comfortably beat rival Kemal Kılıçdaroğlu. Read more on the veteran leader’s extraordinary campaign.

2. Russia launched its largest drone attack on Kyiv yesterday since the start of the war, according to local officials, with 58 of 59 incoming drones downed and 40 downed in Kyiv alone.

  • Related: The war in Ukraine is offering an opportunity for neighbouring Moldova to resolve a 30-year frozen conflict in the Russia-backed rebel region of Transnistria.

3. PwC has suspended nine partners following a scandal over leaked emails in Australia. The accountancy firm has pledged to release an internal review this year after emails leaked in February showed how the firm used confidential information about changes to Australia’s tax law to win new business.

4. Tight labour markets and loose fiscal policies will prolong inflation in some developing countries, analysts have warned, with underlying price pressures remaining stubbornly entrenched even as food and energy prices fall from last year’s highs. Read the full story.

5. Advertising giant WPP has teamed up with Nvidia to use generative artificial intelligence in the production of ads at scale for its clients. The new technology platform will be announced by the chipmaker’s chief Jensen Huang today. Here’s how it can create ad campaigns in minutes.

The Big Read

A worker at the blast furnace in a plant in Duisburg, Germany
A worker at the blast furnace in a plant in Duisburg, Germany. Hydrogen’s potential includes replacing coal in some steelmaking processes © AFP via Getty Images

Green hydrogen has a seductive appeal. Done right, the zero-emissions energy source has the potential to penetrate many corners of the global economy and be instrumental in the fight against climate change. But there’s a catch: the Financial Times calculated that delivering green hydrogen requires $20tn of investment by 2050 — and globally, we are only about 0.15 per cent of the way there.

We’re also reading . . . 

  • Japan’s complicated companies: Japan’s economy could be set to gain from investment abandoning China, but its complicated web of company holdings are frustrating any possibility of lightning-fast growth, writes Leo Lewis.

  • The scholar banker: Peter Orszag has been appointed the new boss of the advisory and asset management firm Lazard, whose revenues have plunged this year. For some, the cerebral former adviser to Barack Obama might be just what the company needs.

  • China loses steam: Industrial production, profits, property sales and credit growth have all fallen short of expectations in the world’s second-largest economy, sapping confidence in China’s post-pandemic recovery.

Chart of the day

Accounting firms in the US are being urged to revamp their business models to attract more young people after the numbers taking exams to enter the profession plunged to the lowest level in at least 17 years.

Column chart of Candidates by year showing Numbers taking the CPA exam fall to lowest in at least 17 years

Take a break from the news

© Landmark Media/Alamy

What makes the owners of the extravagant homes that adorn the hit TV show Succession open their doors to film crews? According to the location scouts that find impressive properties for TV and film the answers range from getting children a new career to boredom.

Additional contributions by Tee Zhuo and Annie Jonas