Debt Ceiling Looms as Fiscal Cliff still Unresolved

No matter what happens with the fiscal cliff over the next few days, a potentially bigger budget mess is just around the corner.
Congress will have to raise the debt ceiling soon, probably by late February or early March.

The deadline sets the tables for another fight on Capitol Hill, where some Republican lawmakers view the debt limit as leverage in negotiations with President Obama over spending cuts and reforms to Medicare and Social Security.
The debt ceiling is a law that goes back to the early 1900s that caps how much debt the federal government can hold.
Last week, Treasury Secretary Tim Geithner warned Congress that federal borrowing would hit the $16.394 trillion debt ceiling on Monday.
Treasury can then buy the government about $200 billion of borrowing headroom by temporarily shifting how some U.S. holdings are invested. With the public debt increasing about $100 billion a month, that gives Treasury about two more months to borrow and stay under the cap.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza