US default would be bad, but not necessarily catastrophic

The markets are right to be concerned about the wider implications if the US Federal government is unable to service its debts. This would be uncharted territory and no-one can be sure exactly how events would pan out. Nonetheless, provided any default were seen as temporary and “technical”, rather than reflecting a fundamental inability to pay, the fall-out should be limited and far less severe than that which followed the collapse of Lehman Brothers.