Former House Speaker Paul Ryan predicts that US lawmakers will reach a deal on raising the federal debt limit, but signaled investors should brace for a “bumpy” ride until that happens.
(Bloomberg) — Former House Speaker Paul Ryan predicts that US lawmakers will reach a deal on raising the federal debt limit, but signaled investors should brace for a “bumpy” ride until that happens.
Speaking on Bloomberg TV, Ryan said he expects brinkmanship on the debt ceiling as President Joe Biden and congressional Republicans haggle — perhaps even a few days beyond the “X-date,” when the Treasury Department won’t have enough funds to meet all federal obligations.
But, the Republican said, ultimately, the two sides will come to an agreement.
“Stay cool, we’re going to make good on our bonds,” Ryan said. He added that fiscal reforms are crucial, and that “at the end of the day, we’re going to have to get serious about our debt crisis.”
The former chairman of the House Budget Committee said Speaker Kevin McCarthy and GOP lawmakers are unlikely to get any big reforms to programs like Medicare and Social Security and will have to settle for more incremental reforms like spending caps.
His predictions come the same day Biden is set to unveil his budget proposal — which includes spending increases, suggesting the two sides are headed into debt-ceiling negotiations far apart.
Ryan also said it will be difficult for the Federal Reserve to get inflation down without a recession, but that it has “no choice” but to raise interest rates.
“My guess is you’ll probably won’t to get out of this without a recession — get out of this being getting to 2% inflation,” he said. “It’s going to take a long time. Longer than people thought and hoped.”
Asked about who will be the 2024 Republican presidential nominee, Ryan said it’s too early to say, but that “I think it’s going to be somebody not named Donald Trump.”
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