The U.S. hit the debt ceiling on Thursday, which forced the Treasury Department to begin taking so-called “extraordinary measures” to continue paying the government’s bills.
Treasury Secretary Janet Yellen told lawmakers on Jan. 13 that these short-term moves, including suspending reinvestment in the workplace retirement plan for federal employees, could allow the government to pay its obligations until June, after which the U.S. would be in danger of defaulting on its debt.
Putting the politics of it aside, you may be wondering the million-dollar question: Is this situation likely to have a long-term effect on my money?
“In a word, no,” says Brad McMillan, chief investment officer for the Commonwealth Financial Network.
Of course, it’s a little more nuanced than that. Read on for the answers to the most relevant questions about the debt ceiling, and why, as a long-term investor, you shouldn’t be paying too much attention to the headlines.
Remind me — what’s the debt ceiling again?
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