Debt Ceiling Debate Likely To Come Down To The Wire

President Biden and House Speaker Kevin McCarthy (R-Calif.) announced over the weekend that they had reached a tentative agreement to raise the debt ceiling. The House will likely vote on the agreement today or tomorrow, setting up several hours of debate and amendments in the Senate on the deal. US Treasury Secretary Yellen told Congress in a letter last week the US will run out of money on June 5th is the debt ceiling is not raised. The OBL believes even with the last-minute dramatics, Congress will vote to raise the debt ceiling till 2025 before we default on our debt. Once the ceiling is lifted the US Treasury will need to in short order ratchet up its borrowing to keep up with government spending. This means Treasury will issue a ton of new short-term debt that will be attractive to the average consumer or commercial customer and could lead to a drain on deposits. Bank customers could invest in new US debt versus keeping their cash in banks.