The U.S. government finances its debt obligations primarily through continued borrowing in the open market. However, this process is constrained by the statutory debt ceiling, which is set by Congress and subject to political negotiation and partisan interests.

Should the government reach the debt limit and exhaust its available cash reserves, the Treasury would be unable to make scheduled payments on outstanding securities. Such a failure would constitute a sovereign default, with potentially severe consequences for global financial markets.

This market will resolve to YES if, by 11:59 p.m. UTC on December 31, 2025, it becomes publicly known that the U.S. Department of the Treasury failed to make a full coupon or principal payment on any outstanding Treasury security by its contractual due date.

Data sources: Official communications from the U.S. Department of the Treasury and verified reports from reputable international news agencies, including Bloomberg, Reuters, and the Associated Press.