Government shutdown, debt ceiling looming...

[tsptalk]

Debt ceiling negotiators close to a deal, with IRS funding in the spotlight

The White House and congressional negotiators were closing in on a compromise agreement to raise the debt ceiling for two years.

House Republicans are on track to win on some top priorities, including rescinding some of the $80 billion allocated for the IRS by last year’s Inflation Reduction Act.

https://www.cnbc.com/2023/05/26/debt-ceiling-deal-developments.html

 

[tsptalk]

Tax inflows help push the deadline out a few days...

Treasury says it won’t run out money until at least June 5, buying time for debt ceiling talks

WASHINGTON — Treasury Secretary Janet Yellen said Friday that the United States will likely have enough reserves to push off a potential debt default until June 5.

“We now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen wrote in a letter to House Speaker Kevin McCarthy.

https://www.cnbc.com/2023/05/26/tre...une-5-buying-time-for-debt-ceiling-talks.html

 

[James48843]

Well, June 5th is getting closer and closer.

I’m seeing a lot of pushback today from both R’s and D’s on the deal. I do not know if there will be enough votes in the House to pass- at least 23 R’s in the House have passed objected, and there are a number of D’S in the Senate objecting to the Manchin gas pipeline in portion.

We should know by Thursday or Friday whether it will get a passing vote. They will need 60 on the Senate- and I don’t know if they will have that.

I’m still taking a wait and see approach.

Any ideas out there on what will happen to stocks if it passes? And what if it fails? Will we get to June 5th without a law signed? If so, what will the effect be on stocks? Bonds?

Your thoughts? .




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[tsptalk]

Any ideas out there on what will happen to stocks if it passes? And what if it fails? Will we get to June 5th without a law signed? If so, what will the effect be on stocks? Bonds?

Your thoughts? .

My guess is that the market has "mostly" priced in a deal, meaning there is more risk is on the downside if no deal is made. A signed deal will likely trigger a modest rally, but with the Fed's FOMC meeting on deck in a couple of weeks, it will quickly be business as usual. The Jobs Report Friday will be important as the Fed contemplates pausing at the June meeting. The market is currently pricing in a 60% chance of a 0.25% hike.

 

[nasa1974]

The fringe Democrats and Republics aren't going to get want they want. Too bad. Suck it up and do what is right for the Country and not for party!

 

[weatherweenie]

That's what gets me about those who like to throw the phrase, We the people, around. They fail to understand understand, that sacred phrase applies to EVERYONE!

The fringe Democrats and Republics aren't going to get want they want. Too bad. Suck it up and do what is right for the Country and not for party!

 

[FireWeatherMet]

I agree with many here, that the "fringe" on both Dem and GOP are not going to get their way, even Massie, a very conservative congressman on the rules committee yesterday voted to forward the bill to a vote in the House.

The Senate tends to have more "Adult Leadership" thru its ranks, and many of them still remember the sharp market drop of 20%+ and the Moody's downgrade of US debt back in 2011, back then those who pushed for default, were blamed in the media and by the public, so I feel that yesterdays Rules committee vote was the big hurdle, and that this bill will go thru the House tonight and get passed by the Senate in time for June 5th.

I exited stocks a week ago, locking in modest monthly gains, might even end up in the top 10 for May given this mornings downward action....so considering putting my $$ where my mouth is, and using 2nd May IFT to go back into stocks COB today....at least into the first part of June.

 

[tsptalk]

Latest:

A package of rules advancing the Fiscal Responsibility Act passed by a vote of 241-187, with 52 Democrats siding with Republicans to support it and 29 Republicans voting against the measure, along with most Democrats.

https://www.cnbc.com/2023/05/31/debt-ceiling-bill-house-vote.html

 

[tsptalk]

Debt ceiling bill passes in the House, advances to the Senate days ahead of default deadline

https://www.cnbc.com/2023/05/31/debt-ceiling-bill-house-vote.html


Crickets in the overnight futures market so far.