Another resurging theme is now front and center for investors to digest: the US Debt Ceiling crisis. Thanks to a potential default by the US government by the end of May, President Joe Biden has invited the top 4 congressional leaders next week in the White House for a face-to-face talk to tackle this potential economic catastrophe. If the US's 31.4tn borrowing limit is not raised or suspended, the US will potentially face millions of job losses, bankrupt businesses, and no doubt, a market crash. The debt crisis is due to Republicans and the Biden administration not meeting eye to eye on what's up for negotiation. Republican lawmakers want spending cuts in return for raising the debt limit, while Biden and congressional Democrats want to raise the debt limit unconditionally. And this leaves the question, what will lawmakers decide on, and what should investors expect?
But first, let’s understand what the debt ceiling is.
