Fed to maintain rates, U.S. default risk remains high.

The Federal Reserve has reiterated that interest rates will remain high and could even go higher, with markets taking note. Negotiations between President Biden and top congressional Republican Kevin McCarthy have not yet resulted in a deal to raise the debt ceiling past its $31.3 trillion limit, but they are edging closer to an agreement that would avoid a US debt default. Despite cautious optimism, there is still skittishness in markets, with the yield on the 1-month T-bill trading close to its highest on record and the cost of insuring exposure to US debt remaining elevated.