JPMorgan Warns US Has a 25% and Rising Chance of Going Past the Default X-Date

JPMorgan said there is about a one in four chance that the US will reach the so-called X-date, when the government runs out of money, if a debt ceiling deal is not reached, and that the probability is rising. "We still think the most likely outcome is a deal signed into law before the X-date, though we see the odds of passing that date without an increase in the ceiling at around 25% and rising," wrote Michael Feroli, JPMorgan's chief US economist. In the latter case, he thought the Treasury would likely prioritise principal and interest payments and while this would avoid a technical default, there would still be some downside effects, including a possible downgrade of the US credit rating.