Listen to this article

US Treasury Advisory Committee Urges Ending Debt Ceiling Citing Credit Rating, Market Volatility, and China Borrowing Rates

12 posts • GPT (4.1 mini)

Updated May 1, 2025, 06:21 AM

The U.S. Treasury Borrowing Advisory Committee (TBAC) has recommended eliminating the federal debt ceiling, stating that the current debt limit has failed to promote fiscal responsibility and has instead harmed the U.S. credit rating. According to TBAC minutes, the debt ceiling contributes to increased market volatility, higher debt service costs, and risks to the dollar's status as a reserve currency.

The committee's preferred approach is for Congress to delegate broad borrowing authority to the administration to fund government obligations without the constraints of a debt ceiling. TBAC also highlighted concerns that the ongoing debt limit process could lead to rising yields and a steeper yield curve, warning that market participants doubt a credible path to a balanced deficit outlook over the medium term. The advisory panel's recommendations come amid tariff-driven yield spikes and looming default risks. Additionally, it was noted that China now borrows in U.S. dollars at rates lower than those available to the U.S. itself, underscoring the urgency of addressing fiscal imbalances. Foreign investors hold approximately 33% of U.S. government bonds, with China owning about $760 billion and likely an additional $500 billion through European countries such as Belgium.

More breaking stories on DeepNewz — updated live.

#Congress #China #European #Belgium

Financial Analysis

Associated Financial Markets

More financial news and market updates→

Related Prediction Markets

Debt ceiling raised or suspended before July?

Will U.S. National debt surpass $38 trillion in 2025?

•

Sources

jp.reuters.com(2)reuters.com(2)globalmarketsinvestor.beehiiv.com

Global Markets Investor

@GlobalMktObserv

🚨Who owns the US Treasury market? Foreigners hold 33% of all US government bonds. China owns ~$760 billion of US government bonds. The country likely holds another $500 billion (difficult to estimate) through EU countries such as Belgium.👇 https://t.co/ogXmkclp6x

ロイター

@ReutersJapan

US Debt Advisory Committee proposes abolishing the federal debt ceiling https://t.co/MuIOqWlkmK https://t.co/MuIOqWlkmK

Anna Wong

@AnnaEconomist

This is my reaction reading the Senate Budget Committee proposed concurrent Fiscal Year 2025 budget resolution — 💣💸💸💸🌪️🌊 Bond market tantrum probably not over.

Story Timeline

1 month ago•Latest version

US Treasury Advisory Committee Urges Ending Debt Ceiling Citing Credit Rating, Market Volatility, and China Borrowing Rates

1 month ago•Original version

TBAC Urges Congress to Delegate Borrowing Authority Amid Debt Ceiling’s Impact on US Credit Rating, Reserve Assets, and Market Volatility

Image Viewer

US Treasury Advisory Committee Urges Ending Debt Ceiling Citing Credit Rating, Market Volatility, and China Borrowing Rates

Financial Analysis

Associated Financial Markets

Related Prediction Markets

Debt ceiling raised or suspended before July?

Will U.S. National debt surpass $38 trillion in 2025?

Sources

Story Timeline

Similar Stories