U.S. equity markets tumbled during late morning trading Friday after key debt ceiling negotiators, representatives of House Speaker Kevin McCarthy, reportedly walked out of a private meeting with White House officials.
U.S. Rep. Garret Graves, a Republican participant in the discussions, voiced his displeasure with the proceedings, calling the other side “unreasonable,” according to the Bloomberg report.
The status of talks are now in limbo, with no clear plan for when they might continue. Graves said more productive dialogue is needed: “Unless they are willing to have reasonable conversations about how you can actually move forward and do the right thing, we’re not going to sit here and talk to ourselves.”
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The ongoing negotiations are a crucial effort to stave off a possible U.S. debt default, a risk that Treasury Secretary Janet Yellen warned could materialize as early as June 1.
The deadlock between Republicans and Democrats, who disagree on spending cuts and regulatory changes, has lasted since the Treasury hit the debt limit earlier in January.
Investors are also feeling the heat, according to the Bloomberg report: experts are warning that any default could trigger a significant rise in borrowing costs, a sharp downturn in the stock market and a ripple effect that could severely impact the global economy, possibly even echoing the crash of 2008​.
Market Action: The S&P 500 (NYSE:SPY) fell as much as 0.46% before rebounding. Gold Futures spiked 1.21%. Five-year treasury notes fell 2.95%.
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