Cost of insuring against US default climbs on debt ceiling fears

US credit default swaps reach their highest level since at least 2008 amid concerns of a potential default, despite being viewed as unlikely. Lower than expected April tax revenues have heightened concerns.

April 25, 2023 . 6:27 PM

1 min read

One-year US credit default swaps are trading at 106 basis points, their highest level since at least 2008.
Investors are moving to protect against or profit from a US default, even though it is still viewed as unlikely.
Lower than expected April tax revenues have heightened concerns of a potential default.
The US is considered a much higher default risk than most other countries, with CDS for Italy, the UK, and Greece trading at 39, 14, and 46 basis points, respectively.
President Biden has warned that a US default would be a financial calamity exceeding anything that's ever happened financially in the US.