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The Fed on "Possible Macroeconomic Effects of a Temporary Federal Debt Default"

Calculated Risk

Although other countries have defaulted on their sovereign debt, these defaults occurred in situations where the government could not feasibly continue to service its debt. federal debt ceiling, in contrast, would be a voluntary decision to stop meeting the government’s obligations even though it has no problems doing so.

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Financial Market Round-Up – Apr’24

Truemind Capital

Here are some of the popular themes and the risks associated with them: Falling Interest Rates : There has been earnest demand by market participants to cut interest rates in the US and other developed economies on the back of falling inflation rates. Central Governments have given hope of meaningful rate cuts within this year.

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Manage client expectations through the midterms

Nationwide Financial

That doesn’t bode well for the party currently in control of Congress, the Democrats, nor for the future of unified government with Congress and the White House under one-party control. However, historical precedent points to the difficulty of maintaining unified government after midterm elections. See chart below.)

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Secretary Yellen to Speaker McCarthy: "unable to continue to satisfy all of the government’s obligations by early June"

Calculated Risk

From Treasury Secretary Janet Yellen to Speaker McCarthy : "After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time."

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Market Extra: Government bonds held at banks may be so-called ‘toxic asset’ of next financial crisis, fund manager says

MarketWatch

banks, one in which government bonds would be the “toxic asset” at the center of it all.That’s one of two scenarios being entertained by European global investment manager Eric Sturdza Investments, which managed $1.3 Banks are one of the most prominent players in the financial market with a need to put capital in a safe place.

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Government Debt and Stock Returns

ClearMoney

Exhibit 1 shows that roughly half the Organization of Economic Co-operation and Development (OECD) member countries have general government debt-to-gross domestic product2 (debt/GDP) ratios above 70%, with 10 countries—including the US, Japan, and the United Kingdom (UK)—exceeding 100%. Turning to the Data.

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Financial Market Round-Up – Apr’23

Truemind Capital

Equity Market Insights: The last quarter has seen one of the major shakeups from the prevailing easy situation over the last decade for the global economies. Thankfully, the Governments intervened to avoid major spillover effects on the overall economy. The Adani saga also aggravated volatility. For the last 1.5