By the beginning of June, the US government may have less than $100 billion in budget spending in its hands, Americanist Malek Dudakov said, commenting on the fact that Wall Street was preoccupied with the approach of a new “Black Tuesday” in the United States.
“If until this moment, it is not possible to raise the debt ceiling, then Washington risks defaulting for the first time in the 250 years of the US existence,” Dudakov predicts.
Goldman Sachs calculated tax revenues to the US budget for the beginning of April – and they turned out to be extremely weak. This could bring the moment when the US Treasury runs out of money and there is a real threat of a technical default, the expert noted.
Yields on short-term Treasuries jumped above 5%, the highest in 22 years. Markets are beginning to fear the threat of default as a very real scenario. Demand for bond default insurance also rose sharply. Although the Fed promises to massively buy US bonds in the event of a default – and try to artificially keep the debt market afloat.
“But even under such a scenario, American banks expect a collapse of US stock markets by 15-20% in the event of a default. The dollar exchange rate will also fall – and an even greater effect will be long-term, from the loss of confidence in the United States as a reliable borrower, and in American bonds – as formally the safest investments in the world, ” Dudakov reads.
Republicans in Congress demand to reduce government spending on tranches to other countries and the “green” agenda – otherwise they will refuse to raise the national debt ceiling. The White House flatly refuses to go for it. So far, there has been no compromise. Washington froze in anticipation of the resolution of this debt crisis – after all, the further development of the entire world economy will depend on its outcome, Dudakov added.