A lot of news tonight.
The Democrats met to try and come to a deal, Biden spoke to the D caucus late this afternoon, no reporters, and no mobile phones were allowed. So this account in Politico, which is sympathetic to Ds, comes from other Ds in the room.
1/6
The Democrats met to try and come to a deal, Biden spoke to the D caucus late this afternoon, no reporters, and no mobile phones were allowed. So this account in Politico, which is sympathetic to Ds, comes from other Ds in the room.
1/6
The open!
President Biden deflated the air of urgency around a bipartisan infrastructure vote and tamped down liberal dreams of a $3.5 trillion spending bill in a speech before House Democrats Friday that left some members fuming.
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He made it worse!
2/6
politico.com/news/2021/10/0…
President Biden deflated the air of urgency around a bipartisan infrastructure vote and tamped down liberal dreams of a $3.5 trillion spending bill in a speech before House Democrats Friday that left some members fuming.
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He made it worse!
2/6
politico.com/news/2021/10/0…
Remember the debt ceiling is tied to the infrastructure and (now formerly) $3.5 trillion spending bills via reconciliation.
With no deal on these two bills, we get no debt ceiling hike. Biden further said there is no urgency, then how is the debt ceiling getting raised?
3/6
With no deal on these two bills, we get no debt ceiling hike. Biden further said there is no urgency, then how is the debt ceiling getting raised?
3/6
The T-Bill mkt freaked out.
The "kink" in the T-Bill curve spiked (blue). Y'day (orange) for context.
This is a massive move for a sleepy market like T-Bills that have a few weeks.
The last bid at the end of the day for the late October bills was over 15 basis points!
4/6
The "kink" in the T-Bill curve spiked (blue). Y'day (orange) for context.
This is a massive move for a sleepy market like T-Bills that have a few weeks.
The last bid at the end of the day for the late October bills was over 15 basis points!
4/6
Translated, the T-Bill market is saying Ds are not going to raise the debt ceiling in time, the Treasury will go into technical default, and it will get ugly and messy.
Sell the late Oct T-Bills that will default first (so rates spike) and sell them hard!
5/6
Sell the late Oct T-Bills that will default first (so rates spike) and sell them hard!
5/6
The Democrats have Until Sunday night to come up with something to prevent a debt ceiling debacle in financial markets. Let's see what they come up with.
Oh yeah, if this is not enough, we can also ask how long Powell and Clarida have at the Fed.
bloomberg.com/news/articles/…
6/6
Oh yeah, if this is not enough, we can also ask how long Powell and Clarida have at the Fed.
bloomberg.com/news/articles/…
6/6
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