US President Joe Biden and congressional leaders were scheduled to meet today again to discuss the debt limit. It was suddenly postponed without any reason. Several hours after the meeting was delayed, it was announced that staff discussions had progressed. Next week, a new meeting will be held to announce the progress of the staff. Markets remain sceptical, despite the fact that many are still skeptical.
As June is considered the deadline to reach an agreement, there are still two months left to negotiate. Generally speaking, the art of brinkmanship doesn’t include reaching an agreement week in advance of the deadline. In the past, confrontations were fought to the limit. The market would be surprised if an agreement was reached so early.
Is 2011 repeating itself or is there something else?
In the past there have been many confrontations about the debt ceiling, but the one that was most dramatic occurred in 2011. The current situation has been compared with that 2011 crisis. Two days before the deadline for raising the debt ceiling, an agreement was only reached.
The US credit default swaps, which is the amount that investors have to pay for…