- The $36.1 trillion US debt limit was hit on Tuesday, prompting the Treasury to use extraordinary funding measures.
- A suspension of debt issuance through March 14 could suppress bond yields and help stocks.
- Meanwhile, a prolonged debt ceiling debate could lead to potential gridlock.
The Trump trade may be boosting stocks in the early days of the new presidential administration, but there’s a tailwind coming from the bond market that could keep the rally going in the coming months.
According to a letter to Congress from outgoing Treasury Secretary Janet Yellen, the $36.1 trillion debt ceiling was hit on Tuesday.
That has left the Treasury Department to rely on “extraordinary measures” to avoid the threat of a technical default. Some of those measures include the Treasury Department pausing payments into certain government accounts, like the Postal Service Retiree Health Benefits Fund, to meet more…
