Republican and White House negotiators are moving closer to an agreement to raise the debt limit and cap federal spending for two years, according to people familiar with the matter, as time grows short to avert a catastrophic US default.

The two sides have narrowed differences in talks over recent days, though the details agreed to are tentative and a final accord is still not in hand, according to the people, who asked not to be named.

Under the terms of the emerging agreement, defense spending would be permitted to rise 3% next year in line with Biden’s budget request.

The tentative agreement on the two year debt limit increase was previously reported by the New York Times.

“We know where our differences lie,” McCarthy told reporters at the Capitol, adding that he planned to work through the holiday weekend there.

“We do not have an agreement yet. We knew this would not be easy. It’s hard, but we’re working. And we’re gonna continue to work till we get this done,” he said.

Shares opened marginally higher in Japan and South Korea, with Australia’s benchmark little changed. Hong Kong’s market is closed for a public holiday.

Yields on securities due in early June — the period in which Treasury Secretary Janet Yellen has warned the US might run out of borrowing capacity and be unable to make payments — slipped back Thursday after reaching levels above 7% the previous day.

Read more: McCarthy Vows to Work Through Long Weekend on Debt Deal

--With assistance from Jarrell Dillard, Steven T. Dennis and Erik Wasson.