Who’s Not Sweating the Debt Ceiling? The Markets
Traders don’t believe that Congress is foolish enough to allow a default, and even if one were to occur, they are signaling it would be short-lived and less damaging than feared.
Stock and bond investors are confident in a deal.
Photographer: Anna Moneymaker/Getty Images
The consensus appears to be that markets will implode if Congress doesn’t raise the US government’s debt ceiling by June 1, which is when the Treasury Department expects to run out of cash to pay the nation’s bills.
Treasury Secretary Janet Yellen has said that such a default would trigger a “financial catastrophe.” Moody’s Analytics warns that financial markets would be “upended.” The White House estimates that the stock market would get cut in half. On Thursday, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon echoed those concerns, telling Bloomberg that a US default is “potentially catastrophic” and that panic could spread to markets outside the US.