Wall Street executives are reportedly preparing for the worst in regard to the looming Unitedย States debt ceiling deadline.
Citigroup chief executive Jane Fraser reveals the ongoing partisan debate is โmore worryingโ than arguments over previous debt ceiling deadlines, reportsย by Reuters.
Unitedย States Treasury Secretary Janet Yellen has warned that the Unitedย States will tumble into an โeconomic calamityโ if Congress fails to raise the debt ceiling. She likewise projected that the Government could run out of cash by June 1st if theย challenge isnโt dealt with.
Reuters reports that big bond investors are stressing the importance of liquidity to remain durable amid potential market volatility.
The Securities Industry and Financial Markets Association (SIFMA), a trade group for broker-dealers, financing banks and investment managers, is reportedly gaming out numerous routes the Government canย potentially choose to go down in the event it runs out of cash, including one where the Treasury Department extends maturing securities by one day at a time.
Reuters reports would be โthe most disruptive scenarioโ would be if the Treasury doesnโt offer extensions and fails to pay bonds.
Reveals Rob Toomey, SIFMAโs managing director and associate general counsel for financialย resources markets,
โIt is difficult because this is unprecedented but all weโre attemptingย to do is make sure we develop a strategy with our members toย assist them navigate through what would be a disruptive situation.โ
Negotiations betwixt House Republicans and the Biden Administration continued on Tuesday, though it remains unclear how close the opposing sides are to reaching a deal.
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