- by cnn
- 01 Oct 2023
Wall Street is taking a no-worries attitude about the ticking time bomb in Washington that threatens to blow up the world economy. That might be a problem.
Debt ceiling-inspired selloffs have been almost nonexistent. The Nasdaq is still up by a staggering 22% on the year. And CNN's Fear and Greed Index of market sentiment is nearing "extreme greed" mode.
Perhaps this indifference is because investors have seen this drama before. They know how it ends: with politicians waiting until the last minute before giving in and finally raising the debt ceiling before disaster strikes.
No one wants to see markets panic, needlessly shrinking the 401(k) plans, nest eggs and college savings plans of millions of Americans. Unfortunately, there is a growing sense that a bit of market mayhem might be necessary.
"A selloff in stock and bond markets may be what's required to get donors and voters to pound on lawmakers' doors to stop the drama and increase the limit," Mark Zandi, chief economist at Moody's Analytics, told CNN on Monday.
On Friday, it looked like the White House and Republicans were getting closer to a deal on the debt ceiling before talks unexpectedly broke down.
But even news of that setback was greeted with a collective shrug on Wall Street. Stocks retreated from their highs but the Dow ended the day with a loss of just 109 points, or 0.3%. That's not exactly going to get people to call their lawmakers.
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