The battle over the US debt ceiling has just begun

The battle over the US debt ceiling has just begun

The world will be closely watching the raising of the US federal debt ceiling next month, and consequently, its impact on US economic indicators, while the country is fighting inflation by desperately hiking its interest rates.

The dollar’s ability to continue as a dominant currency in global economies will also come into question.

As the US federal debt reached $31.45tn on 19 January, which is the maximum ceiling set for US government borrowing, the United States finds itself at risk of default if the conflict continues to rage between the Democratic White House and the Republican opposition, with no agreement reached to raise the debt ceiling again, and congressional approval fails to be secured.

As a result, the United States may resort to a number of exceptional measures, the most important of which are closures and a reduction in the level of public expenditures and services, which could lead to a downgrading of the country's credit rating.

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