The U.S. will hit its debt limit sooner than expected, and the deadline to avoid default could get ‘uncomfortably close’ when Congress is on vacation

Bank of America analysts now expect the U.S. to hit its statutory debt ceiling as early as February, moving up their prior forecast of May. The earlier "X-date" could fall uncomfortably close to congressional vacation periods, sharpening the standoff over raising the borrowing limit. Reaching the ceiling forces the Treasury to deploy extraordinary measures to keep paying obligations, putting default risk back on the radar for markets. Investors will watch for updated estimates from Treasury and the Congressional Budget Office, and for any signs of a negotiation framework between the White House and Congress.