Navigating the Looming US Debt Ceiling Crisis: Insights and Perspectives.

A recently released transcript of a 2013 Federal Reserve policy committee meeting provides insight into the options the central bank might take if the US breaches the federal debt ceiling this summer. The options discussed include purchases of Treasury securities at market values, securities lending, and the discount window. More extreme options, such as purchasing Treasury securities that are in technical default or swapping good Treasury securities for bad ones, were considered highly unappealing. Fed officials believe that only fiscal authorities can solve a debt ceiling standoff, but the options discussed could cushion some of the damage to the economy and financial markets.