The US is beginning to be out of time for agreeing on a debt limit increase. But you don’t need a fortune teller to tell you that Biden and McCarthy will eventually agree to increase the US debt limit because everyone in Washington DC love to borrow and spend money. Regardless, we are seeing the 1-year US Credit Default Swap (SR, EUR) rise above 100, higher than during the 2008/2009 financial crisis.
This is occuring as the US Treasury 10Y-2Y yield curve remains inverted and M2 Money growth has crashed.
But never fear! The Evil Hobbitt (aka, Janet Yellen) is still US Treasury Secretary. You know, the one who left interest rates too low for too long (TLFTL) as Federal Reserve Chair, then tightened as soon as Donald Trump was elected President.
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