Definition
The cap Congress sets on how much the US government can borrow to pay bills it already owes.
The story
It isn't a limit on new spending. It's a limit on borrowing to pay for spending Congress already approved, like Social Security checks and interest on the debt. When the cap is hit and Congress hasn't raised it, the Treasury has to use stopgap measures to keep paying.
Why markets watch it
Standoffs over raising it have shaken markets before.
Connects to
Fiscal policyTreasury bills, notes and bondsNational debtTGA
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms