The Debt Ceiling

22 thg 5, 2023

The debt ceiling in the US is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury.
President Biden and House Speaker Kevin McCarthy are set to hold a direct meeting on Monday following a weekend of intermittent negotiations regarding the nation's debt ceiling. This meeting takes place just days before the government faces a critical "hard deadline" where it risks running out of funds to meet its financial obligations.

The possibility of a government default is unprecedented and would have devastating consequences for the nation's economy. Yellen and economic experts have expressed concerns, highlighting the potential for the situation to become "catastrophic."

In the past, raising the debt ceiling used to be a routine act carried out by Congress, enabling the Treasury Department to continue borrowing funds to cover the nation's already incurred bills.

However, in recent times, the vote to raise the debt ceiling has become a point of political leverage, with lawmakers using it as a must-pass bill to push forward other priorities.

House Republicans, who hold the majority this Congress, are currently refusing to raise the debt limit unless President Biden and the Democrats agree to implement federal spending cuts and impose restrictions on future spending.

In my opinion, we will see a suspension of the debt ceiling to allow for negotiations to form and be completed. As a result, I have a short-term bullish outlook, followed by an anticipated drop to $392 after the announcement, whatever it may be.

Looking forward to read your opinion about it!