Members of US Congress return from summer recess Tuesday with the eyes of bond traders squarely upon them. Among their pressing tasks: increase America's borrowing authority and prevent an unprecedented default.
Investors have been shunning Treasury bills that come due in early October, just in case, there's no solution by the September 29 deadline that Treasury Secretary Steven Mnuchin has deemed “critical“ for Congress to act. That's even as he and other members of the Republican leadership have reiterated that they will undoubtedly raise the debt ceiling.
Come Tuesday, the time for talk is over, and the time for action begins.
Political pundits say a viable solution could come from President Donald Trump convincing lawmakers to attach an increase in the debt limit to an emergency aid package for the victims of Hurricane Harvey. That could be a tough sell to some House Republicans, who are likely to vote only for the disaster relief.
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