8 October 2013

The US Budget & Debt Ceiling Stand Off

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by Shane Oliver, Head of Investment Strategy & Chief Economist

Key points

  • The partial US Government shutdown is likely to continue until there is a joint solution to the shutdown and approaching debt ceiling later this month.
  • The debt ceiling poses the greater risk to the US (and global) economy given the risk of debt default by the US.
  • However, the most likely outcome is a last minute increase in the debt ceiling.  And in any event a debt default is unlikely.
  • Shares are vulnerable in the short term as uncertainty intensifies, but are likely to rally solidly into year-end once a solution to the debt ceiling is in place.

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Oct 8, 2013 the-us-budget-and-debt-ceiling-standoff

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