Default Fears Rattle Main Street Investors

Default Fears Rattle Main Street Investors - Medium

Updated May 16, 2023 12:58 pm ET

Benjamin Samuels, a 31-year-old cybersecurity auditor from Los Angeles, started shifting his emergency cash into Treasurys last year, attracted by rising interest rates. He hadn’t expected the U.S. government—thought to be the world’s safest borrower—to find itself two weeks from default.

Mr. Samuels had set up his Treasury holdings to reinvest automatically as bills mature, but he logged on to the Treasury Department’s website last week to reverse that setting. Now he is holding more cash, spooked by the approaching deadline for Congress and President Biden to raise the debt ceiling to avoid an unprecedented U.S. borrowing snafu.

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