In a Politico report, Thorn Run's Jason Rosenstock provides a rosy view of the impact that turmoil within the Republican Party will have on the upcoming fight in Congress on raising the debt ceiling. "I actually think this is good for [the] debt ceiling,” Jason explained to Politico. “The chaos is being caused by the Freedom Caucus, and while they are also opposed to raising the debt ceiling, I think [Thursday’s] activity will reinforce those who want to have Boehner raise the debt ceiling before he leaves."
Wall Street rattled by House GOP bedlam
Wall Street overall reacted tepidly to the McCarthy news on Thursday, with markets little changed. That reflects a general belief that despite the chaos in Washington, both parties will ultimately find a path to raising the debt limit and keeping the government open.
“While it adds to the uncertainty, the assumption of most market participants currently is that this heightened political drama will not materially derail the U.S. economy,” said Mohamed A. El-Erian of Allianz.
Some on Wall Street and in Washington see a potentially benign scenario emerging from the GOP leadership mess.
Under this scenario, the chaos on Capitol Hill — with no clear candidate at the moment who can unite the GOP — will give outgoing Speaker John Boehner a freer hand to cut a deal before he leaves that would both raise the debt limit and fund the government into next year.
Boehner said on Thursday that he would stay on as speaker until a new one has been elected. He had previously said he would leave Congress at the end of this month, just days before the debt ceiling would be hit.
“I actually think this is good for debt ceiling,” said Jason Rosenstock of Thorn Run Partners. “The chaos is being caused by the Freedom Caucus, and while they are also opposed to raising the debt ceiling, I think [Thursday’s] activity will reinforce those who want to have Boehner raise the debt ceiling before he leaves.”