House Speaker John Boehner told Republican lawmakers they need to provide a positive signal on a plan to avert a U.S. default before Asian financial markets open tomorrow, Republican congressional aides said.
Boehner wants at least $3 trillion in cuts in a two-step plan to accompany an increase in the U.S. debt limit, one of the aides said. Concern about Asian markets’ reaction to the collapse of talks on a long-term deficit plan between Boehner and President Barack Obama was a subject in a meeting today among the president and congressional leaders, the aides said.
The markets could be tumultuous if a plan isn’t negotiated over the weekend, said Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co.
“The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this,” Cooper said. “The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis.
“The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose,” Cooper said. Jefferies is one of 20 primary dealers that trade with the U.S. Federal Reserve.
Boehner’s office said congressional leaders would meet at his office at 5:30 p.m. today…