At our monthly Investment Committee meeting yesterday, most of our team’s discussion revolved around the current debt ceiling debate in Congress. While we believe the likelihood of the issue going unresolved for much longer is low, there is growing concern in the markets that Congress will fail to reach agreement on the debt ceiling, which would lead to negative consequences including a default on US government bond interest payments for the first time in history. We discuss why the debt ceiling matters to markets, where the situation currently stands, and how we are preparing for the worst in client portfolios. But first we cover what the debt ceiling is, and its purpose.
