Congress may have averted a government shutdown until December 11, but lawmakers will be under the gun to raise or suspend the debt ceiling long before then.
Treasury Secretary Jack Lew said Thursday he now estimates that “on or about” November 5, Treasury is likely to exhaust special accounting measures that are keeping the country’s debt below its legal limit.
At that point, the Treasury Department would only be able to pay the country’s bills with the cash it has on hand — which Lew expects to be roughly $30 billion.
And that would not be enough to cover the bills on some days, which can amount to $60 billion.
“We anticipate that our remaining cash would be depleted quickly,” Lew wrote in a letter to House Speaker John Boehner.
Lew stressed if that happens, it would be the first time in the country’s history that the United States could not meet all of its obligations.
“There is no way to predict the catastrophic damage that default would have on our economy and global financial markets,” he added.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0750 following Monday's indecisive action
EUR/USD continues to fluctuate in a tight channel at around 1.0750 after posting small gains on Monday. Disappointing Factory Orders data from Germany limits the Euro's gains as investors keep a close eye on comments from central bankers.
AUD/USD drops below 0.6600 after RBA policy announcements
AUD/USD stays under bearish pressure and trades deep in negative territory slightly below 0.6600. The RBA left the policy settings unchanged as expected but Governor Bullock said that there was no necessity to further tighten the policy.
Gold price turns red amid the renewed US dollar demand
Gold price trades in negative territory on Tuesday amid the renewed USD demand. A downbeat US jobs data for April prompted speculation of potential rate cuts by the Fed in the coming months.
Bitcoin miner Marathon Digital stock gains ground after listing by S&P Global
Following Bitcoin miner Marathon Digital's inclusion as an upcoming member of the S&P SmallCap 600, the company's stock received an 18% boost, accompanied by an $800 million rise in market cap.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.