Updated 5:56 p.m. | The Treasury Department said Thursday it would reach the debt limit a bit earlier than was expected by many on Capitol Hill.
Treasury Secretary Jacob J. Lew told Congress in a new letter that thanks in part to lower-than-expected quarterly tax receipts, the extraordinary measures to forestall breaching the debt limit, combined with the new revenues, will run their course just a week after the resignation of Speaker John A. Boehner, R-Ohio, takes effect. Continue reading
Tag Archives: debt limit
Fitch warns it may lower U.S. credit rating
Fitch has placed its “AAA” U.S. credit rating on “rating watch negative,” a step that would precede an actual downgrade. The agency said it expects to conclude its review within the next six months. The firm says it expects the debt limit will be raised soon, but adds, “the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.” Continue reading
U.S. Treasury, Fed planning for possible default – source
U.S. Treasury and Federal Reserve officials worried about the growing possibility of a catastrophic default are crafting contingency plans to mitigate the economic fallout if Congress fails to extend America’s borrowing authority, a source familiar with the plans said.
With just eight days before the Treasury Department says the U.S. will hit its $16.7 trillion (10.46 trillion pounds) borrowing limit, lawmakers and the White House remain far from a deal to extend it. Officials are examining what options might be available to calm financial markets if a U.S. debt payment is missed.
The specifics of their planning remain unclear, but the source said an area of special focus is a key bank funding market known as the tri-party repurchase agreement, or repo, market, where banks often use Treasury bills, notes and bonds as collateral for short-term loans from other banks and big money market funds. Continue reading
US ‘seriously’ considering $1 trillion coin to pay off debt
The US is “seriously” considering creating a $1 trillion platinum coin to write down part of its debt to stop the world’s largest economy defaulting as early as next month, according to financial analyst Cullen Roche.
“I know it’s been spoken about at the White House and a number of prominent people, including congressman [sic], are talking about it,” he said. Continue reading