Wall street falls on concerns about us government shutdown, spending concerns
“There is a very high possibility that there is a government shutdown at the start of January,” said Jeff Bint, principal economist with TD Securities, in a note to clients.
But other experts argue that it wouldn’t be the only thing that would cause chaos.
“There is almost no reason to believe that there will be a shutdown before the end of the month and January, even if there was,” noted economist Jonathan Bernstein of Wedbush gospelhitzSecurities.
For all of those reasons, Bint said, it is better to wait before going into a financial crisis, which would likely hit the sector just as the economic recovery heats up.
The markets, he added, are also being “taken aback” by the government shutdown, which appears to be an unintended consequence of the agreement made Thursday between Democratic Senator Chuck Schumer and Republicans in the House of Representatives, known as the “clean” debt limit.
That deal allows for more borrowing from the federal government, which is needed to keep the government funded.