Some large T-Bill backed money market funds are avoiding T-Bills with maturity around the debt ceiling date. This is because they need liquidity to ensure the

Some large T-Bill backed money market funds are avoiding T-Bills with maturity around the debt ceiling date. This is because they need liquidity to ensure the 1-1 dollar parity. What will likely happen is, T-Bills with those maturity dates will have a higher risk premium and trade at lower values. People like Warren Buffet will gobble them up because they are still zero risk if you are willing to hold them for a few extra months while the debt ceiling issue is worked out. If things get really bad, the fed could offer to buy them with a haircut to ensure markets have liquidity. The T-Bill is the cornerstone of the global financial system. Even with a technical default, no one believes the government won't eventually pay. And if you believe they won't, you should be buying physical gold, guns & ammo + food stuffs because it would be Mad Max'ish were that to happen. The real issue is, if the government is in technical default, the credit rating agencies will downgrade the UST bill. That will result in higher interest rates on ALL government debt as it eventually revolves through. That means less money for existing programs.