Search ForexCrunch

“After being suspended for about a year, the debt limit returned on March 2,” note Rabobank analysts and add: “However, the Treasury Department will take extraordinary measures that could delay a federal government default to September or October.”

Key quotes

“Consequently, raising the debt limit could become tied to the budget negotiations for fiscal year 2020, which starts on October 1, 2019.”

“If no budget deal is reached before October 1 there are two possibilities: either Congress adopts a continuing resolution (triggering automatic spending cuts) or the government shuts down again.”

“Therefore, we may be heading toward a game of chicken between Republicans and Democrats with the threat of a government default and either sequestration or another government shutdown.”