U.S. President Joe Biden conceded Friday that his economic plan won’t pass Congress with US$3.5 trillion in new spending over a decade, the level sought by liberals, but again declared that the legislation will become law.

“I’m convinced we’re going to get this done,” he said at a childcare center in Hartford, Connecticut. “We’re not going to get US$3.5 trillion. We’ll get less than that. But we’re going to get it and we’re going to come back and get the rest.”

Disputes between progressive and centrist factions of Democrats in U.S. Congress have slowed progress on the plan, which would combine a package of tax cuts and spending on education, child and elderly care, climate and other measures with the Senate-passed bipartisan US$550 billion public works bill.

The White House and Democratic congressional leaders are discussing how to scale back the larger, social-spending measure to win the votes of two holdout Senate Democrats, Arizona’s Kyrsten Sinema and West Virginia’s Joe Manchin.

Manchin has said he wants a topline of no more than US$1.5 trillion over 10 years for the legislation, though Biden has said he thinks a compromise might be found around US$2 trillion.

House progressives have vowed to block the infrastructure bill until Manchin and Sinema commit to support a version of the larger measure, which would carry many of their priorities into law.

“They’re not about left versus right, they’re not about moderate versus progressive, or anything else that pits one American against another,” Biden said. “These bills, in my view, are literally about competitiveness versus complacency, about opportunity versus decay, about leading the world or continuing to let the world move by us.”

Meanwhile, U.S. interest rate traders have upgraded to almost 50-50 the odds that the U.S. Federal Reserve will raise interest rates by 25 basis points in June.

Interest rate swaps referencing the June meeting of the Federal Open Market Committee price in around 12 basis points of an increase. A full hike is fully priced into the September meeting, with a second hike by February 2023.

The yield on the two-year Treasury note, meanwhile, climbed as much as 4 basis points Friday, topping 0.40 percent for the first time since March 2020. In eurodollar futures, rates are higher by as much as 10 basis points, also reflecting elevated expectations for Fed rate increases.

(SD-Agencies)