Debt ceiling talks continue as speculated default date of June 8 draws closer

Yahoo Finance Live anchors Seana Smith and Akiko Fujita highlight the speculated default date amid debt ceiling talks, the upcoming meeting between President Biden and Speaker McCarthy, and the market's reaction to the debt ceiling.

Video transcript

AKIKO FUJITA: Well, investors on edge as the US gets closer and closer to being unable to pay its bills. President Joe Biden returning from the G7 summit in Japan. He is expected to meet with House Speaker Kevin McCarthy later this evening.

Now, if the US does default, it could wreak havoc on the markets and the economy. And Seana, you know, we were saying earlier, 10 days is what we're looking at here from that earliest X-date, at least how we've heard it from Treasury Secretary Janet Yellen. But every day, that urgency does go up a bit even if the probability of a fall in default markets aren't necessarily expecting. It's the risk of that is only going to add to the jitters.

SEANA SMITH: Yeah, it certainly will. And that's likely to play out here in the markets in the coming days. Now, lots of talk about that X-date we just heard from Moody's chief economist Mark Zandi in the last hour.

He was saying that he thinks the X-date is right around June 8. In terms of the probability that we will, in fact, breach that date, he said it's about a 10% probability right now. But, of course, you would think that those odds will continue to climb as we do get closer and closer to that X-date.

We have a very important meeting expected to take place this afternoon between President Biden and House Speaker Kevin McCarthy. Lots of talk about how much progress, if any, is going to be made in those discussions Kevin McCarthy saying that he thinks progress needs to be made at this point here.

But, at least for now, the markets don't seem too worried about what is playing out down in DC. We know traders have been closely watching it. But until we get very, very close, it seems like when we've been talking to a number of guests here over the last couple of weeks, until we get extremely close to that X-date, markets will likely continue to shrug this off.

AKIKO FUJITA: Yeah, I mean, the fact that both sides are talking is a good sign. But to our guests-- to the point our guests made earlier today, it is about also looking at what happens after if a deal is done because that's going to lead to further fiscal tightening.