Fink, Gross Say Standoff to Be Resolved With No DefaultChristopher Palmeri
BlackRock’s Larry Fink and Pacific Investment Management Co.’s Bill Gross said the U.S. debt standoff will be resolved without a default.
The congressional dispute will be resolved “very rapidly,” Fink said today at a Beverly Hills, California, event hosted by the UCLA Anderson School of Management at the Beverly Hilton hotel in Beverly Hills, California.
“It’s theatrics posed by politicians to get ratings or to get their way via legislation,” Gross said. “It’s not a realistic proposition.”
The budget standoff between congressional Republicans and Democrats has led to a partial government shutdown this week and risks a U.S. debt default. The government will run out of borrowing authority Oct. 17, according to the Treasury Department, which said a default caused by Congress failing to raise the $16.7 trillion federal debt limit could have catastrophic consequences that might last decades.
The yield on the 10-year U.S. Treasury touched a seven-week low today and the Standard & Poor’s 500 Index fell the most in a month as the budget deadlock persisted into a third day. U.S. Treasuries lost 2.4 percent this year through yesterday, according to Bank of America Merrill Lynch indexes.