US default probability at lowest since January - MSCI
Reuters
Published May 31, 2023 11:39AM ET
NEW YORK (Reuters) - The probability of a U.S. default has declined to its lowest since January, according to MSCI estimates, as a debt ceiling deal gets closer to the finish line.
The one-year market implied probability of a default as of market close on May 30 stood at 1.3%, the lowest level since January, Andy Sparks, Head of Portfolio Management Research at MSCI, said in a statement on Wednesday.
The default probability - calculated using credit default spreads from S&P Global (NYSE:SPGI) Market Intelligence - peaked at 4.3% on May 11.
"This probability plunged over the past two days as the market became more convinced that a legislative solution to the debt ceiling crisis is at hand," Sparks said.
The U.S. House of Representatives is due to vote on Wednesday on a bill to lift the government's borrowing cap.
Without congressional approval, a potential default could come early next week.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.