BY: Alex Gloy
What You Need to Know About the Debt Ceiling
The US debt ceiling debate sparks concern, but a bill signed by President Biden temporarily suspends it until January 2025.
US debt ceiling: Originating from fiscal responsibility, it sets a limit on government debt issuance, adjusted over 100 times since WWII.
Debt ceiling contradicts authorized spending, risking default and severe implications for the US economy.
Debt ceiling implications: shutdown, default, credit downgrade, market volatility, and global economic impact.
Government default triggers credit event, causing non-payment, financial difficulties, credit downgrades, and economic contraction.
Rating agencies concerned about US credit rating despite debt ceiling agreement, impacting global borrowers and bond markets.
Debt ceiling: Contentious political issue with blame game and risky negotiations. Recent deal suspends limit until 2025.
Depleted Treasury account necessitates $600B replenishment, impacting debt issuance and Federal Reserve's balance sheet plans.
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