RAISING THE ROOF IN THE US

The debt ceiling is an often-debated topic in the United States. It plays a crucial role in the country's fiscal management and is the only policy of its kind in the western world. Established in 1917, the debt ceiling sets a limit on the amount of debt that the U.S. government can legally accumulate. While its initial purpose was to provide Congress with oversight on borrowing, the debt ceiling has evolved into a contentious political issue, with debates over raising it becoming increasingly sensitive and politically motivated. In recent times, the debt ceiling has sparked market uncertainty and impacted both the stock and fixed income markets. This article delves into the origins of the debt ceiling, its political sensitivities, and the short-term market reactions following the raising of the debt ceiling in 2011 and 2013.

Link to article