Unveiling the Future: Forecasting the US Debt Ceiling and Financial Market Trends

Abstract

The US debt limit has important implications for economic and financial stability. By analyzing historical data, this article finds that there is a significant correlation between the debt limit and the US financial market. The article also constructs an exponential smoothing mathematical model to successfully predict the debt limit in the future and test the accuracy of the model using historical data. The results show that the debt limit has a significant positive linear correlation with the S&P 500 Index and the Spot Gold Price Index. Although there is no linear correlation between the debt limit and the dollar index, this paper finds a hidden pattern by comparing the data of the Democratic and Republican administrations. Based on the results of the projections of the debt limit for the next five years and the correlation with the three major indices, the article makes a reasonable prediction of the future trend of the US financial market and provide insights. These results suggest that the situation in the United States may be more optimistic than expected.