A 30-second read by the Baron Team: Have you heard about the debt ceiling and wondering how it may impact you? For our Baron clients, we are paying close attention. At the time of this writing on May 31st, the House of Representatives will be voting on a bill this evening at 8:30pm. As we understand it, they expect to have the necessary votes to pass the bill in its current form. At Baron Financial Group, we feel a default is highly unlikely.
The following are some excerpts from the May 26, 2023 Charles Schwab article, “Debt Ceiling Standoff: What Investors Should Know”, that should help explain - What is the debt ceiling and why do markets care?
- "The debt ceiling is the total amount the U.S. government is authorized by Congress to borrow to meet its existing obligations, including interest payments on Treasury securities."
- "If the U.S. government should fail to make interest payments on Treasury securities, it would have "defaulted" on its legal debt obligations for the first time in history."
- "Once an agreement is reached, it will need to be turned into legislation.
Please reach out to your Baron Team if you have any questions about Your Personal EconomySM, or you would like a link to the full Schwab article.
Disclosure: This is a general communication being provided for informational purposes only. Past performance is no guarantee of future results. Every investment strategy has the potential for profit or loss. This material is not intended to be relied upon as a forecast, research, tax or investment advice. The opinions expressed are as of May 31, 2023 and may change as subsequent conditions vary.