By Davide Barbuscia
NEW YORK (Reuters) – Investors have been flocking to U.S. Treasuries as a safe haven due to market turmoil fueled by President Donald Trump’s trade policies, but a looming debt ceiling debate and ongoing political brinkmanship are stark reminders that even the world’s ultimate risk-free asset is not immune to cracks.
The $28.5 trillion U.S. Treasury market is the world’s largest bond market, known for its liquidity and stability, allowing investors to quickly move large sums of money. Yet there are a number of issues that could challenge views on the safety of U.S. debt securities.
Chief among them is the debt ceiling, a self-imposed borrowing cap that requires congressional approval to be suspended or raised. A debt ceiling showdown in 2023 spurred a sell-off in stocks and bonds, pushed the U.S. to the brink of default and hurt its credit rating.
