Views from the Harbor (Episode 11): What Happens When The U.S. Treasury Runs Out of Money?

Views from the Harbor (Episode 11): What Happens When The U.S. Treasury Runs Out of Money?

This week’s episode of “Views from the Harbor” is a replay of a recent webinar hosted by Kristof Gleich and Jake Schurmeier, Portfolio Manager and Head of Fixed Income within Harbor Capital’s Multi-Asset Solutions Team.

With the subject being the debt ceiling and what happens when the U.S. Treasury runs out of money, not only was Jake the ideal guest due to his previous work at the Treasury, but he also was a part of the group who was charged with setting up the contingency plans outlining what they would do, should the U.S. ultimately default on its debt, without the ability to issue more.

Throughout the recording Kristof and Jake talk about why this all matters, what the contingency plans are, and ultimately, what they believe may happen moving forward.

Important Information

The views expressed herein are those of Harbor Capital Advisors, Inc. investment professionals on or about May 10, 2023.

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The views expressed herein are those of the Harbor Multi Asset Solutions Team as of May 10, 2023. They may not be reflective of their current opinions, are subject to change without prior notice, and should not be considered investment advice. These views are not necessarily those of the Harbor Investment Team and should not be construed as such. The information provided is for informational purposes only.

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Fixed income securities fluctuate in price in response to various factors, including changes in interest rates, changes in market conditions and issuer-specific events, and the value of an investment may go down. This means the potential to lose money.

As interest rates rise, the values of fixed income securities are likely to decrease and reduce the value of a portfolio. Securities with longer durations tend to be more sensitive to changes in interest rates and are usually more volatile than securities with shorter durations. Interest rates in the U.S. are near historic lows, which may increase exposure to risks associated with rising rates. Additionally, rising interest rates may lead to increased redemptions, increased volatility, and decreased liquidity in the fixed income markets.

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