Whatâs Going On Here?Data out on Wednesday showed that Europeans are spending as much as they did before the pandemic â and in all their old favorite haunts too. What Does This Mean?Europeâs been enjoying a return to almost-normal: schools and offices have reopened after a year and a half, and nearly two-thirds of the regionâs residents are now fully vaccinated. So it stands to reason that theyâre flocking to shops and restaurants in their droves, with the use of public transport at its busiest since the start of you-know-what. Even movie theaters are making as much money as they did in the beforetimes â all the more remarkable considering the lockdown-driven shift toward streaming services. The million euro question, then, is how long Europe can keep this up: tourism still hasnât fully recovered and supply shortages arenât going anywhere, so the regionâs not exactly out of the woods yet⌠Why Should I Care?The bigger picture: The US wants more debt.
The US isnât in such a secure spot. See, the country has a habit of spending more money than it makes from taxes, and it issues bonds to make up some of the shortfall. But the governmentâs now reached the limit on what it can borrow, and itâs looking for the votes to raise that so-called âdebt ceilingâ. If it canât find them by the end of the week, the government could run out of money as soon as mid-October, putting a stop to everything from welfare payments to infrastructure investments.
For markets: A bad month to be a bond.
A strapped-for-cash US wonât be able to pay interest on its bonds either, which would send prices plummeting. Thatâd only add to the marketâs problems: the worldâs central banks have already said theyâre thinking about raising interest rates, which would make existing bonds less attractive and bring down their prices. That threat alone has sparked a selloff, which might explain why the bond marketâs on track for its worst month since March. | 
