The US has been warning about the risks of its debt ceiling, but now it’s having an impact on the world’s largest and deepest bond market. The $29 trillion US Treasury bond market is at stake, with lenders questioning the country’s creditworthiness due to years of spending.
As Congress works on a new tax-and-spending bill, investors are worried about what this means for the future. “We can’t just continue to spend and assume that the markets will take it,” says [expert]. The yield on US debt, or interest rate, is closely watched by lenders, who use it as an indicator of the country’s financial stability.
With global economies increasingly interconnected, a crisis in the US bond market could have far-reaching consequences. As such, investors are taking a closer look at the risks and potential implications of a US debt ceiling breach.
Source: https://www.marketwatch.com/story/whats-at-stake-if-worlds-most-powerful-market-finally-buckles-after-decades-long-u-s-debt-splurge-35de1617