What To Watch In Debt Ceiling Debate

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What To Watch In Debt Ceiling Debate

B
Benzinga

17 Views • Oct 05, 2021

Description

As a deadline to raise the U.S. debt ceiling approaches, investors should watch for several things that could be impacted by a government default or near-default. Short-term Treasury yields are in a state of flux. One-month bills yield 0.1%, but 3-month bills yield 0.038%—that’s the widest spread since March of 2020. Repo rates closed Monday at 0.05%, rising as high as 0.07% last night and falling as low as -0.10%. Investors are hedging with options, increasing volatility in that market. Credit default swaps would pay off in the case of a government default, trading at levels not seen since December of 2020. Finally, investors put $33 billion into money-market funds in just the last week of September.