if the US government does default, that will probably cause the prices of Treasury bonds to go up , since a government debt default is a crisis and crises cause a flight to safety and the safest assets are, still, Treasuries:
This is certainly not our modal view, but in the unlikely event of a technical default, we think Treasury yields would decline and the curve would steepen. This seems unusual in the context of a default, but Treasuries have rallied into the latter stages of other serious debt ceiling debates in 2011 and 2013.
Money Stuff: Can Markets Handle the Debt Ceiling?
from Matt Levine ✉️
- If all the burghers of Small Town USA get together and say “we want...from Matt Levine
- It is funny to imagine an end state here in which markets are entir...from Matt Levine
- After 2008, there was a perception that the government was implicit...from Matt Levine
- from the SEC’s perspective the important thing here is that the rul...from Matt Levine
- The very most important thing to understand in finance and economic...from Matt Levine
- Every so often the US government thinks about defaulting on its deb...from Matt Levine
- The three bank runs which already happened had idiosyncratic causes...from Bits about Money
- The decision to sharply manage down the price of eggs was, indirect...from Bits about Money