The U.S. debt ceiling will be reached in mid-January instead of the previously expected January 2nd.

In this letter, Yellen expressed:

1. A new debt ceiling will be established on January 2nd, which will equal the debt value on January 1st.

2. However, on January 2nd, there will be a redemption from a trust fund that will reduce the debt by $54 billion. This means the U.S. government can continue to borrow $54 billion.

According to her estimates, the new debt ceiling will be reached between January 14-23 (this, of course, depends on the government's spending pace).

I mentioned the debt ceiling issue a long time ago; this is a form of monetary easing. Because before a new debt ceiling is negotiated, the Treasury will use "extraordinary measures," which means spending the money in the TGA, effectively acting as a buffer. Currently, there is $764 billion in the TGA, which is enough for the government to spend for several months.

In other words, the bull market may be delayed until mid-January to kick off.

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