Washington extends emergency debt ceiling measures until July 24

US Treasury Secretary Scott Bessent informed members of Congress that he has decided to extend the current use of extraordinary accounting measures to remain within the federal debt ceiling until July 24, 2025.

In his letter, Bessent reiterated the warning he issued to congressional leaders in May, urging swift action to either raise or suspend the debt ceiling before the scheduled August recess.

In a letter sent Wednesday to House Speaker Mike Johnson and other Congressional leaders, Bessent announced an extension of extraordinary accounting measures through July 24, aimed at keeping the federal government under the statutory debt limit. The move complies with the expiration of the previous debt issuance suspension period on June 27.

Bessent urged Congress to act before the August recess to safeguard the full faith and credit of the United States.

The new timeline increases pressure on Republicans to pass a sweeping tax and spending package in the coming days, as GOP members in both councils remain divided over key legislative priorities.

Countdown to “X-Date”

Bessent expressed confidence that Congress could pass the bill by July 4, which would allow the administration to finalize key trade agreements following President Donald Trump’s April 2 announcement of reciprocal tariffs on dozens of countries.

Trump suggested lawmakers be locked in a room and forgo their recess until the legislation is finalized.

Independent analysts estimate the Treasury will be able to meet its funding obligations until at least August. JPMorgan Chase analysts predict September 2 as the potential "X-date", the day the Treasury exhausts its ability to meet payments. The Bipartisan Policy Center estimates the X-date to fall between August 15 and October 3.

In a June 23 client note, Lou Crandall, chief economist at Wrightson ICAP and a leading Treasury market watcher, wrote that the best estimate is September 15. Crandall noted it is unlikely the Treasury would run out of cash during the August recess, but warned that it’s also not impossible.

Investors are demanding higher yields on Treasury bills maturing in mid-August, reflecting growing concerns over a possible delay in raising the debt ceiling, according to a note by BNY Mellon macro strategist John Velis.