Debt ceiling drama returns: Yellen warns of mid-January deadline

Treasury Secretary Janet Yellen fired off a warning shot to Congress at this time, flagging a crucial debt ceiling timeline that would rattle markets in early 2025.

&]:mt-2 list-disc space-y-2 pl-Eight” depth=”zero”>
• Debt ceiling reinstates Jan 2
• Default danger window: Jan 14-23
• Treasury to deploy ‘extraordinary measures’ if wanted

The timing provides one other layer of complexity to an already heated political surroundings following the presidential inauguration. Markets have largely shrugged off earlier debt ceiling standoffs, however the compressed timeline might spark volatility.

“Extraordinary measures” – Treasury’s emergency toolkit – will kick in if Congress fails to behave, however these are short-term fixes, for maybe Four-6 weeks. The actual take a look at might be whether or not the brand new Congress can navigate the political minefield round elevating the ceiling, particularly as Trump desires it eradicated.

It is going to be value watching how the brand new administration’s relationship with Congress impacts the pace of negotiations — we’ll see who’re the true fiscal hawks.

The market additionally assumes that Trump is not critical about bringing down the deficit, one thing this spherical of negotiations might reject or reinforce.

This text was written by Adam Button at www.ubaidahsan.com.



Source link