Business Excellence Awards
Applications are now being accepted for the 14th Annual Business Excellence Awar ...
By Cordell Eddings
By Cordell Eddings
NEW YORK - Financial conditions tightened after the first face-to-face talks between President Barack Obama and congressional leaders failed to break the budget logjam as a partial U.S. government shutdown entered its third day.
The Bloomberg U.S. Financial Conditions Index fell to 1.19, the lowest since Aug. 30. The gauge, which is up from 0.31 at the end of 2012, measures stress in the markets by combining everything from money-market rates to yields on government and corporate bonds to volatility in equities. During the debt-ceiling debate of August 2011, it fell as low as negative 1.631.
President Barack Obama urged House Speaker John Boehner to hold a vote on funding federal operations without strings attached, saying the Republican leader’s refusal to do so is the only thing standing in the way of reopening of the U.S. government. Obama also said today that if Republicans hold up raising the federal debt ceiling to press their demands it would cause “dramatically worse” consequences for the U.S. economy.
“It’s a very difficult investing environment with no resolution from Washington, and a lack of fundamental economic data to go on,” said Christopher Sullivan, who oversees $2.2 billion as chief investment officer at United Nations Federal Credit Union in New York. “Investors are increasingly staying on the sidelines and looking for safety, and the longer this thing gets drawn out, the more uncertainty we will have to contend with.”
The government’s first partial shutdown since 1996 may cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc. Though that’s a fraction of the country’s $15.7 trillion economy, the effects may grow over time as consumers and businesses defer purchases and expansion plans.
The yield on the benchmark 10-year U.S. Treasury note fell three basis points, or 0.03 percentage point, to 2.59 percent at 12:17 p.m. in New York, according to Bloomberg Bond Trader prices. The yield is down from the high this year of 3 percent on Sept. 6 and compares with the average of 3.52 percent over the past decade.