JPMorgan puts odds of no debt-ceiling deal by early June at ‘around 25% and rising’

In a note released Wednesday, a team of analysts at JPMorgan Chase & Co. said they see the odds of Washington negotiators failing to reach a deal to lift the debt ceiling by early June at “around 25% and rising.” Under such a scenario, they said, there’s a “very high likelihood” that Treasury would prioritize principal and interest payments, which would avoid a technical default on government debt. Even so, there would “still be several adverse effects, including a likely downgrade of the U.S. credit rating.” They also see the so-called X-date, or time when the government is likely to be unable to pay its obligations, as falling between June 1 and June 7. All three major stock indexes were lower in the final hour of trading on Wednesday, with a lack of progress on the debt ceiling weighing down markets.