What is the probability of the American government tipping into technical default on August 2, because politicians fail to agree a deal to raise the ceiling on debt issuance? That is the $14,290bn question, following Moody’s decision on Wednesday to put its top-notch Aaa rating on the US on notice for a downgrade.

The answers vary wildly. If you look at online predictions markets – the arena for placing cyber bets – traders currently think there is a 60 per cent chance that no deal will be cut by the end of July. Most Wall Street banks, however, put it far lower. Bank of New York Mellon, for example, reckons the chance of a crisis on August 2 to be a “tail” risk of about 10 per cent. Meanwhile, movements in the Treasuries market imply that the danger of default is negligible: on Thursday the 10-year bond was trading with a yield of about 2.92 per cent, just above this year’s lows.

But if you spend any time listening to Washington politicians, it seems that the risks are significant – and rising. This week I talked to members of Congress from both parties, and to me it seems that positions are hardening in a way that could make it tough to cut any deal. Hence Moody’s move; it now thinks default risk is “l(fā)ow but no longer de minimus”.