Published on 23 May 2023 on Zacks via Yahoo Finance
How Markets and ETFs Are Bracing for Debt Ceiling Crisis
As negotiations on raising the U.S. government's $31.4 trillion debt ceiling approach the deadline, financial institutions on Wall Street are gearing up for the potential consequences of a default. Given that U.S. Government bonds serve as a foundation for the global financial system, accurately predicting the extent of the damage that could be caused by default is challenging. However, industry executives anticipate significant volatility across equity, debt and various other markets.
According to an article on Reuters, financial institutions, including banks, brokers and trading platforms, are preparing to address potential disruptions in the Treasury market and bracing for increased volatility in the broader financial landscape.
What Will be the Potential Impact of a Default?