The issue of the U.S. Treasury's debt ceiling is once again approaching a critical juncture. As early as the beginning of May, U.S. Treasury Secretary Scott Bansen had already sent a letter to House Speaker Mike Johnson, clearly warning that if Congress fails to raise or suspend the debt ceiling before mid-July, the Treasury may face the risk of running out of funds.
Latest developments show that the Congressional Budget Office (CBO) updated its estimates this Monday, believing that the government could exhaust its funds between mid-August and the end of September. This prediction has been slightly delayed compared to previous estimates, primarily due to federal tax revenues in April and May exceeding expectations, providing short-term relief for the Treasury.
Nevertheless, Bansen still emphasized that mid-July remains a "critical window," urging Congress to take action before then to avoid the U.S. government falling into a technical default or payment crisis.
Against the backdrop of increasing political divisions and the approaching elections, negotiations over the debt ceiling remain fraught with uncertainty. In the market, investors are beginning to reassess the risks of medium- to long-term government bonds, and rating agencies are also maintaining a high level of scrutiny over the U.S. fiscal outlook. Analysts generally believe that if the X-Date approaches with no progress, it could trigger severe fluctuations in the financial markets.
