The Impact of a US Debt Ceiling Breach on Markets and Banks.

Breaching the US debt ceiling could have disastrous consequences for the economy, ranging from negative to catastrophic. If the government fails to reach an agreement on raising the debt ceiling, Treasury would have to delay payments on various obligations, including Social Security checks, veterans’ benefits, and government worker paychecks. The longer the situation goes on, the worse it gets, with the potential for a severe financial crisis-like downturn. Analysts warn that a breach would tank the stock market, send bond yields soaring, increase interest rates, and cause the US’s credit to be downgraded.