GREENWICH, Conn. — Wall Street is used to a little chaos in Washington. But the crowd at the two-day Greenwich Economic Forum this week responded to House Speaker Kevin McCarthy’s ouster, mounting political polarization and a likely rematch of the explosive 2020 presidential election like it’s a bed of bad oysters.
After years of warnings from credit rating services and analysts, Wall Street’s best and brightest are beginning to weigh the long-term effects of a political ecosystem in which deep partisanship and an emboldened right wing gets in the way of basic government functions. Days after Congress temporarily averted a government shutdown, McCarthy’s sudden exit at the hands of a small group of Republicans is shaking the financial sector’s faith in lawmakers’ ability to manage their fiscal obligations.
With the economy facing headwinds, the recent turmoil in D.C. is like “dancing on a stage that’s set to collapse,” Christine Todd, the chief investment officer of Arch Capital Group, said in an interview. “I’m just wondering when the bond vigilantes come out and say this is dangerous.”