President Obama signed the debt deal — but that can’t fix the economy
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Bob Moon: So, the debt ceiling deal was signed by the president last night, averting a risk of self-imposed crisis. But may be like one of those heap umbrellas in a building storm. For one thing global markets are down across the board this morning, following a sharp drop in U.S. markets yesterday.
Marketplace’s Gregory Warner joins us this morning to explain. Hey, Gregory.
Gregory Warner: Hey, Bob.
Moon: So why did this relief rally turn out to be so short?
WARNER: Well, investors celebrated yesterday that we averted the debt ceiling, and a possibility of default — default or downgrade. But then Wall Street turned its attention away from Washington toward a string of weak economic reports. Those issues include a string of weak economic reports: low consumer spending and dismal job numbers in the U.S., plus trouble in the Spanish and Italian bond markets which means investors are concerned about the financial stability of those countries
Moon: Hey, wasn’t this what we were waiting for? The President signed the debt deal — so what happened?
Moon: Well, I called Jan Randolph, director of Global Risk Assessment for IHS Global Insight. He says the debt ceiling deal might have even spooked investors, who feel we do need the reduce the deficit, but that maybe it’s too soon for an age of austerity.
JAN RANDOLOPH : Not quite yet. The last thing the economy needs now is deep spending cuts. It’s stuck in this very anemic limbo. And it’s of great concern how we actually turn the corner.
Warner: I did ask him is this anemic limbo just a nice word for pre-recession? He says note even close. It would take a lot more bad news for that.
Moon: Marketplace’s Gregory Warner. Thanks, I think
Warner: Thank you, Bob.
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