(Financial Times) US Democrats in Congress are seeking a way to raise the debt ceiling even as policymakers and some government officials warn of looming default.
Top Democrats are already divided over the debt ceiling, with Senator Chuck Schumer ruling out a budget reconciliation that would have allowed the Senate to proceed with only Democratic votes.
House Speaker Nancy Pelosi says they will seek options, despite the rapidly approaching deadline and continued warnings of US credit default.
Republicans have pushed back any idea of raising the borrowing limit. Senate minority Mitch McConnel has closed off a route that Democrats would have used to raise borrowing limits with a party-line vote.
Markets are already warming up over the prospect of “stagflation” amid the looming debt crisis. US stocks posted their most significant loss on Tuesday since May.
Deadlock on debt ceiling means that Senate’s top Democrat Chuck Schumer has about 20 days before October 18 when Treasury secretary Janet Yellen warned of the government running out of money.
SPY is up +0.52%, DXY is up +0.39%.
