President Obama and congressional leaders from both parties had scheduled a meeting Monday to discuss the debt ceiling and government shutdown, but the meeting was postponed amidst news of progress towards a deal.
For the public, the vague news coming out of Washington is getting old.
Sudeep Reddy, reporter for the Wall Street Journal, says that although we don’t know much detail about progress, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell are expressing confidence.
The alternative would cause an economic panic.
“That’s the game here that they’re all playing,” Reddy says. “Markets are testing Congress right now. They don’t believe Congress is going to allow a devastating default and don’t want to get involved in a trade and be on the wrong side of it. Congress is testing markets because they don’t want to be beholden to Wall Street and they still want to get their political goals accomplished here.”
Reddy says most investors aren’t prepared for a situation where the U.S. can’t pay its bills. And major investment firms and money market funds are continuing to pull out of treasuries, just because of the risk of a default — and that comes with dangerous consequences.
“There will be damage in the end regardless,” he says.
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