Debt Default

With an increase in the debt ceiling still awaiting congressional attention, the bond market is pricing in default risk. 1-month T-Bills are yielding 0.0203% while 3-month T-Bills are 0.0583%, over twice as high, a yawning gap given that they are usually almost identical. This gap suggests bond buyers expect the Treasury to, absent an increase in the debt ceiling, start running out of money between late September and late November.