Markets Nervous About The Fed and Washington

Markets in Asia and Europe have slowed down considerably this week after a lack of Congressional progress on the budget for the upcoming fiscal year. This has undoubtedly had a large impact on global equity markets, with futures looking bearish.

A Deadline That’s Fast Approaching

The October 1st deadline is fast approaching and, such a lack of decisiveness has sparked fears over a partial government shutdown. If the government doesn’t raise the debt ceiling the US would falter on its debt, dragging equity markets as a result. The result of this is, at present, there’s very little incentive to buy into the market.

Although it appears unlikely that Congress will fail to pass a budget and raise the debt ceiling, time is fast running out on them to do so and, as a result, there’s a realistic prospect that the market could take a hammering over the coming weeks. Such a lack of progress in negotiations will most likely see investors remain cautious for the rest of the week and beyond, especially because of the lack of other events that would normally influence the markets.

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— EconMatters

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