House Speaker John Boehner told the country that default is “the path we’re on” on Sunday, but the markets aren't nosediving—yet.
House Speaker John Boehner told the country that default is “the path we’re on” on Sunday, but the markets aren’t nosediving—yet.
MorningJoe economic analyst Steven Rattner said Monday that the markets aren’t responding because most people expect a last-minute deal.
“The market is relatively sanguine now because they’re focused mostly on the shutdown being the immediate situation,” Rattner said. “As we get closer, I think you could see the markets get quite rattled. Remember that in the summer of 2011 when we were debating the debt ceiling, the markets went down something like 16%. Right now people perceive there could some type of last minute save, and that is why the markets aren’t going as crazy as they are.”
Last week, White House Press Secretary Jay Carney told Morning Joe the consequences would be “catastrophic without question.”
“What we see with this Republican strategy is a willingness to threaten the very foundation of the world’s greatest economic power, the economy that basically stabilizes the entire world economic system and that is a very risky proposition,” he said.
“How do you believe the Oct. 17 date should be perceived and interpreted by investors?” Harold Ford Jr. asked Rattner.
“I don’t know if Oct. 17 is the ultimate final day or not. It could go on a few more days, maybe another week. It’s not going to go on a lot longer,” he said. “I continue to believe that at the end of the day, as we get late into the night on the 17th, there will probably be some kind of short-term deal to try to find the long-term deal, and we’ll start this movie all over again and we’ll watch it for another six weeks or so.”
CNBC’s Michelle Caruso-Cabera said it’s unlikely a default will happen on Friday’s Morning Joe.
“The chances of a default are very slim to none and we see that in the bond market,” she said. “If the bond market thought that bonds weren’t going to get paid, they would be selling them. And they’re not!”