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Wall Street Eyes August as Possible Drop-Dead Date for Debt Ceiling

  • ‘Little confidence’ in forecast until tax season is over: RBC
  • Debt ceiling has potential to create money-market volatility
Steven Mnuchin

Steven Mnuchin

Photographer: Andrew Harrer/Bloomberg
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The U.S. debt ceiling won’t be reinstated until March and the Treasury will likely find ways to extend funding for some months after that, yet Wall Street analysts are already crunching numbers to determine just when the government’s borrowing authority will finally be exhausted.

Once the debt limit suspension ends on March 1, Treasury Secretary Steven Mnuchin is expected to once again deploy extraordinary funding measures to keep the cash spigot open for as long as possible. In addition to figuring out how much headroom that will create, uncertainties about the volume of April tax receipts also complicate the calculation, but strategists at both Royal Bank of Canada and Bank of America are tentatively penciling in some time in August for the government’s so-called drop-dead date.