US debt ceiling negotiations – down to the wire
As expected the US debt ceiling negotiations went down to the wire, and disaster has been averted for three more months.
If the same battle takes place again in January 2014, when current government funding is anticipated to end, surely political dysfunction will start to affect confidence in the broader US economy.
Investors in the US market may lose some patience if the political stalemate continues for a long time.
Given that the government was closed down for half of October 2013, the integrity of the government’s economic data for the month may have already been put at risk.
We wonder if the October 2013 employment data, which would normally have been collated in the past week, will be compiled at all? At such a major juncture, the Federal Reserve certainly can’t afford to lose any important data indicators.
From a broader perspective, the idea that such a small government faction as the Tea Party Republicans (they only represent 12% of total House Members) can effectively shut the entire government down would appear to go against the founding principles of the United States.
It appears likely that the US Federal Reserve will have difficulty tapering Quantitive Easing purchases.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
