These Charts Show How Worried Investors Are About the Debt Ceiling
- Lack of clarity around crunch point means no clear bills kink
- Treasury’s cash pile is dwindling and bill supply is being cut
A statue of George Washington inside the Rotunda of the US Capitol in Washington, DC.
Photographer: Stefani Reynolds/BloombergInvestors are in limbo about just when the US might be at risk of a technical default, which is making it difficult to get a clean read on how much market concern there is about the government crashing into its debt limit.
The cost of insuring against non-payment of US debts through derivatives is elevated, and close to the levels it reached in some of the more acute debt-ceiling episodes of years gone by. Activity in those contracts has also picked up somewhat. But the lack of precision around a particular deadline, combined with a monetary policy situation that’s in flux, means that interpreting go-to indicators like variations in Treasury-bill yields is murky.