Explainer | A looming U.S. debt ceiling fight is starting to worry investors

The rising risk of a default could push some investors to move money into international equities and foreign governments' bonds.

A debt ceiling fight is looming in the United States yet again, giving investors another worry for markets this year.

The United States will likely hit its mandated $31.4 trillion borrowing limit on Thursday, forcing the Treasury to launch extraordinary cash management measures that can likely prevent a debt default until early June.

Recurring legislative standoffs over the debt limits this last decade have largely been resolved before they could ripple out into markets. That has not always been the case, however: A protracted standoff in 2011 prompted Standard & Poor's to downgrade the U.S. credit rating for the first time, sending financial markets reeling.

Some investors now worry the Republican party's narrow majority in Congress could make it harder to reach a compromise this time.

Here is a Q&A about the implications for markets:

The debt ceiling is the maximum amount the U.S. government can borrow to meet its financial obligations. When the ceiling is reached, the Treasury cannot issue any more bills, bonds or notes. It can only pay bills through tax revenues. The ceiling is currently equal to roughly 120% of the country's annual economic output.

U.S. Treasury Secretary Janet Yellen said last week the government could pay its bills only through early June without increasing the limit. That is sooner than some analysts' forecasts that the government would exhaust its cash and borrowing capacity - the so-called "X Date" - sometime in the third or fourth quarter.