The US debt ceiling saga returns

US short-term bond markets could be choppy as Congress seeks to resolve the looming issue

Once again, the US debt ceiling is in focus. Since March, the US Treasury has been employing “extraordinary measures” to fund the US government, such as halting contributions to certain government pension funds and borrowing money set aside to manage exchange rate fluctuations. But those measures are expected to run out this fall.

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Countdown to the debt ceiling debate

As the March 15 deadline approaches, Treasury bills could become increasingly volatile

Justin Mandeville

In the first quarter of 2017, a newly minted Congress will be tasked with approving an increase in the US government’s debt limit — the so-called “debt ceiling” — which is set to expire on March 15, 2017. If the debt ceiling is not raised, the Treasury bill market could experience volatility as investors adjust to a potential reduction in the supply of Treasury bills.

What is the debt ceiling?

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