Every day, the US Debt Ceiling Crisis gets more and more attention as the US Government must make sure that it is able to repay its loans. Due to the US being the world’s largest economy, the debate over the US debt ceiling is often a close competitor to inflation when it comes time to read financial news.
It is not the first instance that something like this has occurred. In the last few years, several US governments have been forced to raise their debt ceilings in order to pay off debt. In most cases, deals and last-minute concessions have saved the day. These negotiations can cause a sense of uncertainty on financial markets.
Should traders be on high alert because the US Dollar and its value relative to competitors could be in a tornado’s eye? Will the stock markets be hit by a perfect hurricane? Our blog will explain the debt limit and how it may affect the market in the coming weeks.
What is US debt ceiling?
In order to pay off debts, the government must borrow money. You can do this in a number of ways, for example by issuing bonds. The government uses these funds for salaries, to finance their investment plans, and for other obligations.
The US Debt Ceiling is a limit imposed by the US Congress on the…