Local expert warns of what could happen if debt ceiling not raised

DAYTON — The treasury secretary says the U.S. could default on its loans by June 1, if Congress doesn’t raise the debt ceiling.

News Center 7′s Xavier Hershovitz looked into what this could mean for people’s wallets in the Miami Valley.

If Congress doesn’t raise the debt ceiling, it would be the first time in U.S. history we would default on our loans. Because of that, we spoke to an expert about how it would affect us.

Fall Ainina is the Director of Research at James Investment Research and has a decade’s worth of experience in finance.

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Ainina told us if the U.S. were to default it would create a lot of uncertainty, and their investors do not like uncertainty the biggest impact would be interest rates.

“All interest rates in the economy will go up. From car loans to home loans— everything. And that’s what’s going to affect the economy,” Ainina said. “If that happens we are going to push the economy into a recession. But as far as individuals are concerned— the likelihood of their account being impacted is very very low.”

Ainina believes Congress will reach a deal and avoid a default altogether.

If you are planning to buy a house or a car, Ainina says it may benefit you to hold off. He told us a default would greatly impact interest rates.

“I wouldn’t really stop buying a house because of this debt ceiling bickering between politicians,” Ainina explained. “I don’t think that should be an important factor.”

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