US Default Risk Increases, Driving Up Insurance Costs

The cost of insuring US Treasuries against default has surpassed that of some emerging markets and even junk-rated nations, as investors grow increasingly anxious about the prospect of a first-ever US default. Credit-default swaps on one-year Treasuries have hit a record high, making it more expensive to insure Treasuries than the bonds of countries like Greece, Mexico, and Brazil, which have defaulted multiple times and have lower credit ratings than the US's AAA. With politicians running out of time to lift the borrowing limit before the government runs out of money, the situation remains uncertain.