Debt-ceiling talks are at a ‘pause,’ says McCarthy deputy

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Debt-ceiling negotiations are at a “pause” on Friday, said Republican Rep. Garret Graves of Louisiana, a deputy for House Speaker Kevin McCarthy.

It wasn’t immediately clear how long the pause would last.

Graves also suggested the Biden White House’s representatives in the talks were being “unreasonable.”

“We’re not there,” Graves also said, in a remark that indicated a deal wasn’t imminent.

U.S. stocks

sold off after his remarks to reporters, and the S&P 500

was recently trading lower.

“There are real differences between the parties on budget issues and talks will be difficult,” a White House official said. “The president’s team is working hard towards a reasonable bipartisan solution that can pass the House and the Senate.”

Traders also were assessing remarks from Federal Reserve chief Jerome Powell as well as a report that Treasury Secretary Janet Yellen had said more bank mergers may be necessary.

Separately, Senate Minority Leader Mitch McConnell, a Kentucky Republican, said Friday that it is “past time” for President Joe Biden to get serious about the negotiations.

Stocks advanced Wednesday and Thursday, with credit for the gains going in part to upbeat comments from Biden and McCarthy on the debt-limit standoff, but some analysts have warned that markets may have turned too optimistic.

“While we agree that recent developments represent a meaningful positive shift relative to a week or two ago, we caution investors not to overestimate how quick or smooth the path to the finish line will be,” said Tobin Marcus, senior U.S. policy and politics strategist at Evercore ISI, in a note.

Marcus added that “the expectations being set on timing are slightly unrealistic, which could lead to market concern over setbacks next week.”

MarketWatch’s Robert Schroeder contributed to this report.


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