Tuesday , September 28 2021

Debt Roof: The potential for chaos has dazzled Wall Street



But why are investors worried about it? Key economic performance, such as unemployment and consumption, is still very strong.

At least a part of the answer consists of two words: the debt limit. The departure of the frontier wall from the wall, the closure of an incomplete government, is a weakness in the ability of the legislators to engage in a government-wide bargaining deal, which is a more significant financial issue.

Sometimes, in the second half of 2019, the Treasury Department loses opportunity to borrow if Congress and President Donald Trump can not agree on how to get to the valve.

Last year's debt repayment ends March 1. But treasurers can fund their money at least in the middle and close the middle of summer – a series of formalized maneuvers. special measures.

Federal debt is not a problem, especially since the federal government plans to spend $ 1 trillion this year, it is necessary to create this difference and borrow debtors, other countries and many other lenders, to improve the commitments of federal contractors working with the Americans.

The US public debt is considered to be the safest in the world as the US has never paid off its debts. As a global reserve currency, it is unusual to raise the debt costs to a higher level to expose the US dollar's status. Crisis crisis risks can be solved by the market. The only way Congress can reach a truce is by no means a compromise.

According to David Lafferti, the Natixis Investment Managers' key market strategy, "the closing of the Government and its cumulative economic impact. "But I believe that the president is a symbol of relations with the Congress, and many people believe that the work of the government is relatively complicated by the debt crisis."

Markets really are thinking of the debt. Negotiations on the debt limit in 2011 were sent to long-term rating agencies for a free fall in the market in order to reduce the US dollar. S & P has dropped by around 17% from July through August 500 and has not recovered until the end of 2012.

The brief information from the Treasury Department in 2013 hindered the United States from the worst recovery of Great Silence.

Although the majority of Americans do not own shares, a drop in share price may have a negative impact on the investment and a negative feedback cycle with consumer moods that reduce costs. Last week, when the Consumer Confidence Board's Consumer Confidence Index dropped to its lowest level in July 2015, this downward spiral came to the forefront.

Many observers believe that the US government will not be able to pay off the debt. At the beginning of this month, Moody's Investor Service described the prospect of real defaults as "very low". The Agency only reduced the US institutional capacity to debate the debate on debt burden in order to "weaken political dispute and weaken the budgeting process."

But there was no guidance in the history of the Trump era, since it was a fragment of the break.

Christopher Smart, head of macroeconomic and geopolitical research at Baring's Assets, says: "You can not negotiate with each other and no real talks are going on," says Christopher Smart. "It does not like", they tell a few days, and they spend money on border security. The markets do not see anything that can bring progress, and the Democrats strongly support the Congress when they come together again.

As a rule, the White House will use its power over the royalties to obtain benefits from the president in the case of government split.

In 2011 and 2013, the representatives of the Congressional Republic have demanded a reduction in the reputation of borrowing, which led to a sharp decline in budgets that voted to increase the power of borrowing. This time, Democrats can use it to require a permanent regulation on the periodicity of the Childhood Perspective program or to approve the Law on Effective Ethics or to enforce the Law on Affordable Care.

But Mram Mulwanai, the leader of Trump, was one of those who risked the US economy to pull the American economy out of the siphers without letting the Obama administration get more money.

Concerns about the unexpectedness of Trump and his assistants have been aggravated by the events of the last two weeks. This unexpected and substantial resignation of the Secretary of Defense James Mattis, the Treasury Secretary Steven Mnuchin, was unexpectedly appealing to the bank's chief executives to convince investors. in the first instance, repeatedly announced that the liquidity of the market as well as the continuation of raising interest rates against the FRG's several Round Fed Chairman Jay Powell.

Many investors worry that although they want to keep interest rates low, they will have a negative impact on the rise of Powell.

"The Fed, which resembles the events of the previous crisis, should convey a clear message that would increase the rates," wrote Canaccord Genuity analysts. "Our fears – the president has turned the Fed into a policy of open criticism and toughening it."


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