US Default Scenarios Span From Localized Pain to Dimon’s ‘Panic’
- Market participants have done contingency planning for default
- Dimon warns of potential for irrational reactions by investors
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Investment bank clients are peppering Wall Street with questions about what happens if the US Treasury in coming weeks runs out of cash and does the unthinkable — failing to make payments due on Treasury securities, the bedrock of the global financial system.
With the clock ticking to June 1, the date by when Treasury Secretary Janet Yellen has advised her department may run out of sufficient cash, as of Monday there was still no deal announced between President Joe Biden and Speaker Kevin McCarthy on raising the federal debt ceiling.