The US stock market could gain additional momentum in the form of rising share prices of American companies as US authorities struggle to raise the public debt ceiling. This can be facilitated by the policy of local Ministry of Finance (MoF) representatives, informs Bloomberg quotes Steve Donze, Pictet Asset Management fund manager.
Currently, the size of the US public debt exceeds $31.5 trillion. February 8 US President Joe Biden He insisted The House of Representatives and Senate have agreed to raise the “ceiling” of the national debt “without preconditions”, as has been done before.
“Unable to borrow, the Treasury now has to withdraw from its bank account with the Central Bank to finance itself by pumping liquidity into the financial system. “This will likely support stock prices until the ceiling is lifted,” he said.
The last time such a fierce struggle for the “ceiling” of public debt was fought in the United States in 2011. Then the American authorities agreed to raise the border bar “at the last minute”. In many ways, this prevented local stock quotes from falling further. The “push” corresponding to the American stock market may be received in the near future, he concluded.
February 11 Labor law and public administration law expert Adam Mill declarationThat the US national debt in excess of $31.5 trillion could lead to a “total collapse” of the federal budget in the near future. One of the main problems is that interest payments on debt will exceed $1 trillion in the near future and interest rates may be at the market level of 4-5% per annum.