The Debt Ceiling Dispute Raises the Risks for ‘Risk-Free’ U.S. Bonds

It’s come to this.

Because of the debt ceiling crisis, a corner of the financial markets sees the U.S. government as a riskier borrower over the next month or so than Bulgaria, Croatia, Greece, Mexico, the Philippines and a host of other countries that have never been remotely considered linchpins for the modern global financial system.

Don’t get me wrong. I hold Treasuries in my personal portfolio and, with one noteworthy exception, there is no sign so far that investors around the world are abandoning Treasuries — or the U.S. dollar or the U.S. stock market, for that matter. The United […]

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By Donato