U.S. Debt Ceiling Negotiations Halted by Republican Walkout: Stock Indexes Fall Across the Board

U.S. Republican negotiators walked out on Friday (19th) and accused the White House team of delaying negotiations and being unreasonable. The debt ceiling negotiations were suddenly halted, which affected major U.S. stock indexes to fall across the board. However, the White House said a deal was still possible.

Rep. Garret Graves, Republican of Louisiana, said that negotiations are currently on hold because negotiations have not been productive, and it is not clear whether negotiations will resume over the weekend. “We’re not going to sit here and talk to ourselves until people are willing to have a reasonable conversation about how to move forward and do the right thing,” he said.

Graves’ remarks poured cold water on the progress of the debt ceiling negotiations. The speaker of the US House of Representatives, McCarthy, made the most positive statement so far on the debt ceiling negotiations yesterday, and other lawmakers also expressed optimism.

On the other hand, according to foreign media reports, White House negotiators Shalanda Young and Steve Ricchetti said when they left the negotiation meeting that they would “play it by ear”.

However, a White House official said a deal was still possible. “A deal is still possible if both sides negotiate in good faith and realize they (the Republicans) are not going to get everything they want,” the official said.

Quincy Krosby, chief global strategist at LPL Financial, believes that this may be a performance by the Republican Party to put more pressure on the decision-makers of the Democratic caucus, or it may be to take advantage of the fact that President Biden is currently not in the country. Either way, it’s not good news.

The expiry of the US debt ceiling is looming, and if the two sides still fail to reach a consensus on raising the US$31.4 trillion borrowing ceiling, a catastrophic debt default is possible. The U.S. Treasury Department has warned that if the impasse continues, the government may not be able to pay all of its bills by June 1.

Republicans are taking a hard line in the negotiations, with the House Freedom Caucus yesterday urging the Senate to vote on a House bill that would raise the debt ceiling until March next year in exchange for a 10-year start to deep cuts.

Major U.S. stock indexes fell on news that debt-ceiling talks had stalled, after a week of positive progress in talks that suggested a deal was imminent.

before the deadline,Dow Jones IndexIt fell nearly 70 points or 0.21% in intraday trading, and was temporarily reported at 33,467.08 points;NasdaqThe index fell more than 30 points, or nearly 0.2%, to 12,658.81 points temporarily;S&P 500 IndexIt fell nearly 0.1% to 4,194.55 points temporarily;fee halfThe index fell 0.5% to 3,207.52 points provisionally.U.S. 10-Year Treasury Bond Yieldrose to 3.7%,dollar indexIt fell to 103.01.