The increasingly popular global trend of seeking alternatives to the US dollar, initiated after the start of the Ukraine conflict, in the face of tough US sanctions against Russia, could accelerate as the US debt ceiling issue remains unresolved. .
In a note published Tuesday, Goldman Sachs addresses this question, warning of a real risk to the US dollar in the event of a protracted fight between US political factions over the debt ceiling.
The bank wrote that “banking tensions have put financial markets on edge, and further discussion of raising the debt limit is reckless and irresponsible.”
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He added that “anything that takes us away from our status as the world’s reserve currency, the world’s safest and most liquid asset, is bad for the American people, bad for the dollar and bad for the United States government.”
For its part, the rating agency Moody’s announced last night that it now believes there is a 10% chance that the debt ceiling will not be raised on time, lamenting that “what once seemed unimaginable is now a real threat.”
Moody’s warns that “interest rates will soar and stock prices will fall”, even if it is only a brief debt limit breach.
Finally, the US Treasury Secretary, Janet Yellen, has recently estimated that the US borrowing limit will surely be reached in early June.
Source: Ambito
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