Elon Musk Thinks US Defaulting On Debt Looks 'Increasingly Possible'

With President Joe Biden and House Speaker Kevin McCarthy not being able to reach any consensus regarding the debt ceiling crisis, concerns surrounding a potential default on national debt have resurfaced.

When “Whole Mars Catalog” tweeted stating defaulting on the national debt is a bad idea, Tesla chief Elon Musk responded to the tweet by saying “Increasingly possible.”

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Musk's comments appear to be in line with what the majority of market participants could be anticipating following the inconclusive talks between the two leaders. Biden and McCarthy did agree to hold another meeting on Friday.

Speaking outside the White House on Tuesday afternoon, House Speaker Kevin McCarthy said there had been "no new movement."

"Everybody reiterated the positions they were at," McCarthy said.

Biden has asserted that default is not an option. "There's a lot yet to discuss, but at a fundamental level I agree with what Leader McConnell said in our meeting today: Default is not an option," he tweeted.

What may also be stoking anxiety among market participants is the fact that both sides have agreed a short-term suspension or increase in the borrowing limit is out of the question.

Caution: Meanwhile, the Treasury Borrowing Advisory Committee, an industry group that advises the government on debt management, cautioned it was "deeply concerned about the lack of resolution".

"This current stalemate runs the risk of undermining the foundation of the U.S. Treasury bond market: the full faith and credit of the U.S. government," the group wrote in the letter to Treasury Secretary Janet Yellen.

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