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Here’s a look at what markets are expecting and planning for, and how a default might happen.

The United States is inching closer to calamity, as lawmakers continue to spar over what it will take to raise the country’s $31.4 trillion debt limit.

That has raised questions about what will happen if the United States does not raise its borrowing cap in time to avoid defaulting on its debt, along with how key players are preparing for that scenario and what would actually happen should the Treasury Department fail to repay its lenders.

Such a situation would be unprecedented, so it’s difficult to say with certainty how it would play out. But it’s not the first time investors and policymakers have had to contemplate “what if?” and they’ve been busy updating their playbooks for how they think things may play out this time.

While negotiators appear to be moving toward an agreement, time is

Keep reading this article on The New York Times Business.

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