How worried should be we be?
Photographer: Eric Lee/BloombergWorried Markets Want to Believe a Debt-Ceiling Deal Can Be Done
There’s been little progress so far in Washington, but optimists are hopeful that the US can avoid default
There are still some optimists in the market confident that a solution will be found in time to the US debt-ceiling crisis even as the Washington stalemate persists and many investors shun the most at-risk Treasury-bill issues.
The window for averting a potential default is narrowing by the day, and although talks between President Joe Biden and House Speaker Kevin McCarthy on Tuesday yielded little, they are scheduled to meet again on Friday. Treasury Secretary Janet Yellen has flagged the risk that the US could run out of borrowing headroom as soon as early June and many investors have said that the risks are greater even than in 2011, when a narrow miss on the debt ceiling led Standard & Poor’s to strip the US of its top credit rating.