Few More Days
"Ultimately, the debt ceiling will have to be raised, but policy makers might have a few more days than they initially thought," Rajadhyaksha said yesterday.
Treasury spokeswoman Colleen Murray declined to comment on the projections.
Treasury Secretary Timothy F. Geithner told CNBC on July 18 that the deadline for when the U.S. exhausts its borrowing authority "absolutely" remains Aug. 2.
"We will do everything we can to mitigate the damage," he said on the "Fox News Sunday" program on July 24. "We do not have the ability, only Congress has the ability, to make sure that people get their payments on time."
Thirty-year bond yields increased six basis points, or 0.06 percentage point, to 4.32 percent at 5:16 p.m. yesterday in New York, according to Bloomberg Bond Trader prices. They touched 4.34 percent, the highest level since July 8. The Standard & Poor's 500 Index fell 0.6 percent to 1,337.43 after slumping as much as 1 percent.
Four-Week Bills
The Treasury reduced the size of its auction of four-week bills for the first time since May to gain more flexibility as the deadline approaches.
Even if the Treasury's coffers were to run dry, it could work with the Fed "to generate enough cash probably for the next two to three months to avoid any kind of automatic default," said Wells Fargo's Silvia, who is based in Charlotte, North Carolina.
Fed officials aren't providing details about what steps, if any, they would take if Congress and Obama fail to reach a deal by Aug. 2.