The highs and lows of US debt ceilings
Default scenarios
A default on government debt would likely trigger increased volatility across the global financial markets as confidence in U.S. borrowers falls.
Moody’s Analytics predicts that a four-month default would shave around 4% from U.S. gross domestic product, see stock prices fall by a third and result in companies slashing nearly 6 million jobs. Furthermore, its analysis reveals that a default on Treasury bonds could lead to a downturn similar to the 2008 recession.