Debt Ceiling Disruption: Volatility Ahead?

October 7, 2022
It's been two years since markets had to worry about the debt ceiling, which often sparks market volatility. Now it's back, and the clock is ticking for Congress to address it. Here's what investors need to know.

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After You Listen

  • If you'd like to learn more about ESG investing, check out this episode of the Financial Decoder podcast
  • Follow Mike Townsend on Twitter @MikeTownsendCS.
  • If you'd like to learn more about ESG investing, check out this episode of the Financial Decoder podcast
  • Follow Mike Townsend on Twitter @MikeTownsendCS.

The two-year suspension of the debt ceiling expires on July 31. To avoid the U.S. defaulting on its debts, Congress must act to either extend the suspension or raise the debt limit. Mike Townsend looks at the history of the debt ceiling, the challenges Congress faces in addressing it, and why procrastination could spark market volatility in the weeks ahead.

Mike also offers an update on the Senate's two-pronged approach to infrastructure and other spending priorities and the aggressive timeline Senate Majority Leader Schumer has set for getting the bills finished. He also looks at Fed Chair Jerome Powell's testimony before Congress this week and the growing divide at the Fed over when to begin easing its support for the economy, as well as the SEC's focus on what constitutes a "green" fund. And he considers what President Biden's recent executive order on competition means, what industries it impacts, and the timeline for change.

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Stocks Were Lower in Anticipation for Tomorrow’s Key Labor Report

U.S. stocks declined, giving back some of the gains from earlier this week as the volatility in the currency and bond markets continued to be a major source of uneasiness for investors.

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