Marketers Are on the Verge of Facing Debt Ceiling Risk in 2023

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Marketers are once again on the verge of debt ceiling risk in 2023. The debt ceiling is a limit on the amount of debt that the federal government can accumulate.

The current status of the debt ceiling is a little under $31.4 trillion. U.S. government debt has continued to grow in recent years, and if it grows at the same rate over the next four years, it will exceed the debt ceiling.

The U.S. government is on track to reach the debt ceiling by early 2023. If the debt ceiling is not raised, the federal government will not be able to borrow any more money and will have to default on its debt. This would cause a financial crisis and could lead to a recession.

If the debt ceiling is reached; as a result, the Treasury Secretary may be able to use extraordinary measures to buy several months of additional time beyond that. Still, in 2023 the debt ceiling is likely approaching at some point. This could lead to a government shutdown and a crisis in the debt markets.

According to the suggestions put forward by the democrats, the debt ceiling should be raised during the lame-duck session after the midterms.

“We want to deal with the debt ceiling in the lame duck,” Sen. Ron Wyden told reporters.

However, Republicans have refused to do this and are pushing for a vote before the elections. This could lead to a government shutdown and a crisis in the debt markets.

Sen. Joe Manchin has indicated, “I may not support an increase to the debt ceiling without potential budget cuts and bipartisan support.”

The markets are already starting to price in this risk, with yields on government bonds rising as investors demand a higher return to compensate for the increased risk of default. This could lead to higher interest rates for consumers and businesses and a weaker economy.

So far, Congress has always been able to reach a deal to raise the debt ceiling, but there is no guarantee that it will happen again in 2023.

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