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Economic Policy

GOP readies debt ceiling vote as Wall Street braces for costly standoff

Investors are beginning to hedge against a possible government default, laying bare the stakes of congressional inaction

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Updated April 25, 2023 at 5:07 p.m. EDT|Published April 25, 2023 at 6:00 a.m. EDT
House Speaker Kevin McCarthy (R-Calif.) departs after speaking about the debt ceiling at the New York Stock Exchange on April 17. (Jabin Botsford/The Washington Post)
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Investors on Wall Street are bracing for the prospect of a protracted, costly standoff in Washington over the debt ceiling, underscoring the economic risks as House Republicans prepare to vote on new legislation as soon as Wednesday.

In recent weeks, two key developments — including a drop in yields on government bonds set to mature imminently — have suggested a growing panic that the GOP’s demands could cause the country to default, touching off what analysts widely believe would be another U.S. recession.