Concerns over potential U.S. Treasury defaults dominated discussions at the Portsmouth Supplemental Retirement Board meeting on May 4, 2023. Board members highlighted the short-term risks associated with a possible default, emphasizing that while it may not have a long-term impact on the retirement fund, immediate market fluctuations could pose challenges.

One board member expressed skepticism about the catastrophic predictions often voiced by politicians, arguing that any temporary disagreement would likely lead to a swift resolution. "I don’t think there’s a terribly significant long-lasting effect from that," they stated, suggesting that the government would ultimately reach an agreement to avoid default.

However, the discussion took a serious turn as members acknowledged the potential for a downgrade in the U.S. credit rating, which could lead to higher borrowing costs for the government. "The last time this game was played, the United States' credit rating was downgraded," one member noted, stressing the importance of taking these risks seriously. They explained that a downgrade would increase the cost of capital, making future treasury issuances more expensive.

The board's deliberations underscored the delicate balance between short-term market reactions and long-term financial stability, with members urging vigilance as significant treasury financings loom on the horizon. As the situation develops, the implications for the retirement fund and broader financial landscape remain a critical concern for Portsmouth's leaders.