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US heading for a default – Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 22, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at Rabobank, suggest that if the US debt limit is not increased in time, the federal government is heading for a default.

    Key Quotes

    “While the Republicans in the House of Representatives are still looking for a new Speaker, the extraordinary measures that the Treasury Department is using to avoid having to increase the debt limit are estimated to be exhausted by November 3.”

    “As we have seen in similar episodes in recent years, yields on bonds maturing up to one month after the deadline are on the rise again. Previous episodes suggest that within this ‘implied default window’ of one month we are likely to see further yield increases.”
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