Democrats and Republicans must decide in the next day or two how far to take their deadlock over the U.S. debt limit, which is pushing the country perilously close to a catastrophic default.
Wall Street strategists are taking notice of the political turmoil, warning there is growing danger for financial markets as the clock ticks closer to Oct. 18, the date by which Treasury Secretary Janet Yellen expects the country to reach its limit on sovereign debt.
A debt ceiling breach is getting “a little too close for comfort,” TD Securities strategists Priya Misra and Gennadiy Goldberg wrote in a note to clients Tuesday.
Senate Majority Leader Chuck Schumer will force a vote Wednesday — his third try in nine days — on whether to take up a measure suspending the nation’s debt ceiling until December 2022. Republicans, as they did the last two times, promise to block him.
“We’re not voting in any way to help raise the debt ceiling,” said Senator Mitt Romney of Utah, a Republican who sometimes works with Democrats. “As a group we are all together.”
President Joe Biden will meantime hold a White House confab with financial and corporate leaders to highlight the dangers of a looming default. The White House Council of Economic Advisers warned that, in such an event, not only would an economic crisis ensue, but fiscal policy makers would be hobbled in responding — unlike the way they backstopped American families during the pandemic.