What Are the Ramifications of a Debt Ceiling Breach?

October 07, 2021 | Ben Mohr, CFA, Director of Fixed Income, Managing Partner

With an agreement finally showing promise to resolve the U.S. government’s potential and impending debt ceiling breach, investors are assessing how this development might affect underlying portfolios. The debt ceiling is the maximum level that the U.S. government is permitted to borrow. This threshold was set by Congress over 100 years ago to make sure government borrowing does not reach excessive levels. Historically, every time the ceiling has been close to being breached, Congress has legislated a higher debt limit. However, the current situation is especially concerning given how close to the deadline we are and how contentious this issue is in Congress right now.

This newsletter examines the key issues of the debt ceiling, important dates both past and present, and the potential impact of a breach.

Read > What Are the Ramifications of a Debt Ceiling Breach?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Ben Mohr, CFA
Director of Fixed Income, Managing Partner

Get to Know Ben

Related Content

10.14.2021

The Impact of the Delta Variant on the U.S. Economic Reopening

Thanks to a rollout of effective vaccines at the beginning of 2021, daily new cases of COVID-19 in the United…

10.06.2021

Commodities: The Full Story

The first three quarters of 2021 have seen positive performance from a variety of asset classes ranging from U.S. and…

10.04.2021

China: Evergrande and Another Move Down

In August we released our newsletter China: From Leader to Laggard, in which we reviewed how…

Graphic of darkened photo of city buildings, with guidance pattern overlay and "Q3 2021 Market Insights" in white.

10.01.2021

Q3 2021 Market Insights Video

— COMING OCTOBER 21st — This video will feature an in-depth analysis of the third quarter’s performance…

10.01.2021

Build Back Better Act: Proposed Tax Changes by the House Ways & Means Committee Legislative Update

The House Ways and Means Committee released 881 pages of a proposed bill that would make changes to the tax…

Column chart showing Realized Rates for the 10-Year Treasury Yield following the Taper Tantrum of 2013 and the current Forward Rates as of September 28, 2021. Chart subtitle: While the market is expecting yields to rise with Fed tapering, current Treasury forward rates indicate that near-term movements in the 10-year Treasury may be less pronounced than those exhibited during the 2013 Taper Tantrum. Description: Y-axis shows 10-Year Treasury Yield by percentage, from 1.0% to 3.0%. X-axes shows five categories: Spot Rate, 1 Month Later, 3 Months Later, 6 Months Later, and 9 Months Later. April 13 (Realized Rates) columns are at left in each category displayed in purple, and September 2021 (Forward Rates) are at right in teal. Spot Rate 1.70% in 2013, 1.50% in 2021. 1 Month: 2.13%, 1.52%. 3 Month: 2.61%, 1.56%. 6 Month: 2.53%, 1.62%. 9 Month 2.69%, 1.68%. Chart sources: Bloomberg and Federal Reserve Bank of St. Louis, as of September 28, 2021.

09.30.2021

What Does Fed Tapering Mean for U.S. Yields?

Last week, Federal Reserve Chair Jerome Powell indicated the potential tapering of bond purchases at some point in the future…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >