“We’re All Talking About Drop Dead Dating…But We Do look at the tension in advance Dean Baker, co-director of the Center for Economic and Policy Studies, said:
“Obviously people are afraid of the security of the banking system, so they have to worry about creating fear by getting close to it,” he said.
Congress is estimated to have by some summer, If the Treasury Ministry is expected to run out of so-called “special measures” to avoid a national debt default.
Lawmakers from both sides are expected to raise the debt ceiling, which will limit how much the Treasury Department can borrow to cover the country’s bills. but, deep division in Washington on how.
At the same time, there are questions about whether concerns about a stuck debt ceiling could drive up borrowing costs and complicate the recovery of the banking system.
Ben Ritts, director of Progressive, said if the debt ceiling is not raised, or if investors fear the country is headed for default, it is likely that investors will not be repaid on time. “If you think,” he said, interest rates on bonds could rise. Policy Institute’s Center for Funding America’s Future.
“Rising interest rates resulting from fear of default (or actual default) reduce the value of outstanding bonds. It reduces the value of banks’ capital reserves, makes it harder to cover deposits, you just more at risk It’s like Silicon Valley Bank,” Ritz said.
Aris has more.
