There is 'zero chance' of the US defaulting on its debt, Wharton professor Jeremy Siegel says
There is zero chance the US debt-ceiling deadlock won't get resolved, Jeremy Siegel said in his WisdomTree commentary.
The timeline will be extended or the debt limit will be raised, the Wharton finance professor predicted.
US lawmakers are still sparring over the conditions they want for lifting the country's debt limit.
There is absolutely no possibility that the US government will default on its debt, Wharton finance professor Jeremy Siegel has declared.
"There is zero chance the debt issue will not get resolved even though there will be posturing and debate right up to the last minute before timelines are extended or the debt limit is raised," Siegel said in his WisdomTree commentary this week.
US lawmakers are still sparring over the conditions for lifting the country's $31 trillion borrowing limit, with debt ceiling talks continuing on Monday between President Joe Biden and Speaker of the House Kevin McCarthy after hitting an impasse. If lawmakers fail to reach an agreement, the US could end up defaulting on its debt.
Meanwhile, Treasury Secretary Janet Yellen has continued to reiterate her June 1 deadline for Congress to raise the national borrowing limit, adding that the government is unlikely to make it through to June 15 before running out of money.
But Siegel maintained his long-stated opinion that the debt issue will get resolved. While there are other issues for the stock market to be concerned about beyond US political issues, 'the debt-ceiling saga' is still top of mind for investors, he said.
"Market activity last week seemed to hinge on the prospects of debt ceiling talks getting resolved and my sense was short sellers did not want to be caught short in a positive spike higher on headlines of a resolution of the stalemate," he wrote.
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