Wall Street is bracing for stock market chaos as the debt-ceiling face-off drags on
But their warnings do echo the words of policymakers including Treasury Secretary Janet Yellen. She said earlier this month thatDebt-ceiling deadlockThe US hit its $31.4 trillion ceiling on January 19 – but the Biden administration and the Republican-led House of Representatives can't agree on how to resolve the brewing crisis.
Republicans are refusing to vote to lift the debt ceiling unless the White House agrees to future spending cuts. President Joe Biden and Democrats in the Senate believe that issue should be put to a separate vote. Eleventh-hour talks between the two sides have yet to yield much agreement – and according to Yellen, the government will run out of money on June 1 unless they agree to raise the borrowing limit.to warn that the standoff could fuel a rapid rise in uncertainty for both the economy and stocks.
Volatility gauges for US Treasury bonds have jumped on the possibility that the US may fail to repay its debts. Stocks could follow suit if the standoff in Washington carries on, according to BlackRock.
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