JPMorgan: US Technical Default "Unlikely" But 'Sell Stocks, Buy Gold' As Debt-Downgrade Possible

The rapid failure of three banks and the increased usage of The Fed's new facility created to provide liquidity have raised concerns that the debt ceiling debate could become even more politicized as spending cuts have been passed by The House.

While JPMorgan's Joyce Chang and Jay Barry see the possibility of a technical default as low at ~10%, there is agreement that a replay of the 2011 standoff over the debt ceiling, which prompted S&P to downgrade the US credit rating, is likely.