Wall Street still seems surprisingly unconcerned about the risks of a debt ceiling crisis. So-called X Date, the day when the U.S. may run out of money to pay its bills, could be as little as two weeks away. Although the market has been sliding, it hasn’t been panicking.
Not yet, anyway.
This is actually in line with what happened in 2011, the last time a debt ceiling crisis went down to the wire. Then, as now, the markets refused to believe until the last minute that the U.S. political system could be so broken that it could put the financial system in peril.
Wall Street folk memory is of a sharp selloff around the time. But that didn’t happen till late. The worst damage to the markets came after the debt ceiling deal—as the markets digested what seemed like a near miss.
This time around? While the White House and Congressional Republicans are due to meet again tomorrow (Tuesday) to continue talks, the president, and allies like Elizabeth Warren, are talking about invoking the 14th Amendment to do an end-run around Congress if there is no deal at all. Stay tuned.
