Analysis: 1-Year US Credit Default Swaps Near Highest Level Since 2023, US Government Default Risk Rises

According to a report by Jinse Finance, The Kobeissi Letter analysis indicates that the 1-year U.S. credit default swap (CDS) has recently risen to 52 basis points, nearing the highest level since 2023. Excluding the 2023 debt ceiling crisis, the cost of insuring against a U.S. government default is at its highest level in 12 years. Additionally, the outstanding amount of U.S. credit default swaps has increased by approximately $1 billion this year, reaching $3.9 billion, the second-highest level since 2014. Currently, investors are increasingly concerned about the rising deficit of the U.S. government. The U.S. reached its statutory borrowing limit in January and took "extraordinary measures" to avoid default. The analysis points out that the debt ceiling crisis was never truly resolved, and the risk of U.S. government default is rising.