Wall Street banks and asset managers have been preparing for the consequences of a potential default as U.S. government is in talks about raising the $31.4 trillion debt ceiling.
The financial industry has faced similar situations before, such as in September 2021, but the short time frame for an agreement has created tension in the banking industry as the U.S. Treasury Department warned that the federal government might not be able to pay all its debts by the June 1st deadline.
U.S. government bonds are key to the global financial system so the damage a default would cause is hard to predict, but executives expect volatility across equity, debt and other markets.
