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The US government just took a major step to signal its fears over the debt ceiling

Oct 22, 2015, 20:21 IST

AP

The US government just took the first major step to signal its concerns over the congressional standoff over the nation's debt limit.

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On Thursday, the Treasury Department announced that it was suspending the monthly auction of two-year notes scheduled for October 27.

"Due to debt ceiling constraints, there is a risk that Treasury would not be able to settle the 2-year note on Monday, November 2, 2015," the Treasury said in a statement.

The Treasury Department schedules regular auctions for securities to investors, governments, large banks, brokers, and others, borrowing to finance the running of the government. Lenders of short-term debt - like two-year notes - would be most affected if Treasury is unable to repay.

Treasury planned to carry on with the five- and seven-year auctions scheduled during the same week, and said postponing the two-year auction would be less of a risk to the market functioning smoothly.

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