The Treasury Department and New York Federal Reserve met with some of the biggest banks on Wall Street today to discuss the possibility of the U.S. defaulting on its debt. Reuters reports that the meeting was originally slated to involve representatives from around half of the 20 primary dealers but was expanded at the last minute to include all the banks and security firms authorized to deal directly with the Treasury and Fed.
Should Congress not vote to raise the debt ceiling by Tuesday, the Treasury would lose its ability to pay off U.S. debt and runs the risk of defaulting to its creditors.
Rates on Treasury bonds due to mature in August have reached all time highs—a sign that investors in short-term lending markets are dumping debt they fear may not be repaid.
Attendees said the meeting would focus on how much debt the Treasury plans to issue in the next quarter, a number due to be announced next week. But the current stalemate on debt-ceiling negotiations in Congress has thrown into question how much debt the Treasury will be able to sell.