Global equity markets pause
MONTHLY MARKET COMMENTARY |
Capital markets produced mixed results in March as investors contemplated global economic developments, geopolitical concerns in Yemen, and an upcoming increase in U.S. interest rate policy. Domestically, U.S. small cap stocks provided positive returns while their large cap peers pulled back. A rising dollar continued to be a headwind for securities linked to foreign currencies such as commodities, emerging market bonds, and international and emerging market stocks.
Debt ceiling hit again
In February of last year, Congress passed legislation suspending the limit for government borrowing until March 15, 2015. Until then, the federal government was essentially able to borrow to fund daily operations.
The debt ceiling has now been reinstated at the amount currently borrowed, approximately $18.1 trillion, meaning the Treasury Department has no room to take on more debt. As a result, the Treasury Department began taking "extraordinary measures" to avoid the need for more borrowing as long as possible. Those measures can include discontinuing investments in a retirement fund for federal employees and suspending the issuance of special purpose securities to state and local governments. (Source: treasury.gov)
The Congressional Budget Office estimates these measures, along with the current cash that's available, will keep the government from exceeding the current debt limit until October or November of this year. If Congress and the President don't reach an agreement before that time, the concern is that the government would need to shut down and the U.S. could potentially default on its debt.
For more information, read the entire report.