The US debt ceiling debate has rarely been out of the headlines of late, Libby Cantrill, Managing Director and Head of Public Policy at PIMCO, shares her thoughts on the latest update as she comments:
“Despite the pearl-clutching, hysteria, and doomsday-like odds of default and downgrade,here continues to be progress on a debt ceiling resolution with “constructive” and “productive” staff-level meetings between the two sides over the weekend and yesterday. This is consistent with our view that no one in Washington has any incentive to see the U.S. default, but every incentive to try to extract as many concessions as possible in exchange for a debt ceiling increase. Of course, there will likely be more twists-and-turns until a resolution is struck, as no one is also really incentivized to compromise before the actual deadline, and even when a deal is reached, it will still need to be sold to rank-and-file members. Nevertheless, we remain confident that a deal will happen in time to avoid any sort of breech. We also do not believe there will be a short-term deal given exactly zero people in Washington seem to want one.”
