--- title: The Chances of the U.S. Defaulting on Its Debt Are Surging description: The odds of the U.S. government missing its debt ceiling deadline have reached about 25%, according to a new estimate by JPMorgan Chase. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 published: '2023-05-25T19:19:14.000Z' modified: '2024-01-10T13:20:40.000Z' section: Economy and Politics tags: - News word_count: 434 canonical: https://money.com/chances-us-debt-default/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![House GOP Leadership Continues Work On Debt Ceiling Negotiations](https://img.money.com/2023/05/News-odds-missing-debt-ceiling-increased.jpg?crop=0px%2C3px%2C2880px%2C1620px&quality=85) The odds of the U.S. government missing its [debt ceiling deadline](https://money.com/debt-default-money-impact/) have reached about 25% — and the chances are rising by the day, according to a new estimate by JPMorgan Chase experts. Officials say the U.S. could become unable to pay its obligations as soon as June 1 unless Congress takes action. That leaves only a week for lawmakers to strike a deal to raise the nation’s $31.4 trillion [borrowing limit](https://money.com/dollar-scholar-government-print-more-money/). Members of Congress are leaving town Thursday as the House of Representatives recesses for Memorial Day, but debt ceiling negotiations will continue, and lawmakers have been told to be ready to return to the nation's capital immediately in case they need to vote. JPMorgan Chase economist Michael Feroli wrote in a Wednesday note to clients that there’s a mix of “optimism and pessimism” about the prospects of a deal, but for now, it looks like Congress will figure it out before a default. “We still think the most likely outcome is a deal signed into law before the X-date,” Feroli said, referring to the date when the government can no longer meet all its financial obligations and must start making decisions on which payments to make and when. However, time is running out. Feroli stressed that there is a 1-in-4 chance of the [government reaching the X-date](https://money.com/debt-ceiling-questions-answers/), which could have potentially severe consequences for the economy. If no deal is reached, JP Morgan experts say the Treasury Department will likely continue making principal and interest payments on its debt, which would help the country “avoid a technical default.” However, the U.S. credit rating would probably be downgraded, and if the standoff persists to the point where the government does default, the situation would get much worse. Fitch Ratings put the U.S. on watch Wednesday, warning that the down-to-the-wire negotiations jeopardize the country's current AAA rating (the highest possible). ## What it means for you The U.S. defaulting on its debt would likely be a major blow to the economy. Some of the potential consequences include a [stock market decline](https://money.com/what-debt-ceiling-fight-means-for-investors/), furloughs for government employees, a [delay in Social Security payments](https://money.com/social-security-debt-default/) and disruptions to other government programs that Americans rely on like [Medicare](https://money.com/medicare-running-out-of-money-2031/), [Medicaid](https://money.com/lose-medicaid-coverage-health-insurance-options/) and SNAP. Economists say a default could also lead to higher interest rates and [higher mortgage rates](https://money.com/how-debt-default-affects-housing-market/), which would make the already intense housing market even more difficult for buyers. [5 Ways a U.S. Debt Default Would Impact Your Wallet](https://money.com/debt-default-money-impact/) [Investors Should Brace for ‘Significant Volatility’ as the Debt Ceiling Standoff Continues](https://money.com/what-debt-ceiling-fight-means-for-investors/) [A U.S. Debt Default Could Send the Housing Market Into a 'Deep Freeze'](https://money.com/how-debt-default-affects-housing-market/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/chances-us-debt-default/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Economy", "item": "https://money.com/economy/" }, { "@type": "ListItem", "position": 4, "name": "The Chances of the U.S. Defaulting on Its Debt Are Surging" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/chances-us-debt-default/#webpage", "url": "https://money.com/chances-us-debt-default/", "name": "The Chances of the U.S. Defaulting on Its Debt Are Surging", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-05-25T19:19:14.000Z", "mainEntity": { "@id": "https://money.com/chances-us-debt-default/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/chances-us-debt-default/#breadcrumb" }, "dateModified": "2024-01-10T13:20:40.000Z" }, { "@type": "NewsArticle", "headline": "The Chances of the U.S. Defaulting on Its Debt Are Surging", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/05/News-odds-missing-debt-ceiling-increased.jpg?crop=0px%2C3px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-odds-missing-debt-ceiling-increased" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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