Market fears over the United States debt ceiling saga appear to be fading amid signs politicians are edging towards a deal.
The Andrews government will detail a $31.5 billion “COVID-19 Debt Repayment Plan” as part of Tuesday’s state budget,to repay emergency funds borrowed as part of Victoria’s protracted pandemic response.
Equity investors are optimistic about the outcome of negotiations over the US debt ceiling. Bond investors aren’t so confident that common sense will prevail in the debt tug-of-war.
Treasurer Jim Chalmers forecast the first surplus in 15 years in his budget. The cash will go towards paying down debt.
The clock is ticking as a stalemate in Washington threatens to unleash a global financial and economic catastrophe. Not everyone is convinced it will be resolved in time.
The federal government has delayed the point at which its total debt exceeds $1 trillion as it comes within sight of balancing the budget this year.
Continuing high inflation rates and the recent spate of bank collapses could create massive challenges for central bankers and governments.
The notion of the US defaulting on its debt was once unthinkable. But these are not normal times in Washington.
Government debt has climbed to a record high,but better revenues and spending control may stop a further blowout.
The states and territories are borrowing money faster than the federal government,and are on track to owe $600 billion by next year.
It was a minor miracle the world averted a financial crisis last year,but the odds of a major accident are shortening,the world’s leading expert on debt crises warns.