Debt Ceiling

It is critical for the U.S. to meet its debt obligations.

The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.

Given the important role U.S. Treasury debt plays as a world currency and store of value, any default on the nation’s debt would negatively impact the economy and disrupt the operations of our financial markets. A failure to meet our existing obligations would have negative and lasting results on domestic and global markets and Main Street investors and would undermine confidence in the creditworthiness of the United States to the detriment of the economy.

While a default is unlikely, there are two possible scenarios that may play out in the financial markets if there were a failure to pay U.S. Treasury securities. In either instance, this would pose significant problems for the system generally and operations and settlement specifically.

See:

• Delay in Treasury Payments: Discussion of Scenarios (Deck and Playbook, 2021)
• Joint Trades Letter (2021)
• Historical Fact Sheets (2018 and 2013)