As a result of concerns that the government would sooner surpass its debt ceiling, the cost of insurance exposure to US sovereign debt increased on Wednesday to its highest level since 2011.
Data from S&P Global’s (NYSE:SPGI) Market Intelligence revealed that spreads on five-year US credit default swaps increased to 62 basis points from Tuesday’s close of 59 bps.
this reflects the greatest level since 2011 and is more than double where they were at the beginning of the year.
As a result of Congress’ failure to extend the government’s debt ceiling. The United States Treasury Secretary Janet Yellen warned on Tuesday that a default would result in a “economic catastrophe” and boost interest rates for coming years.