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But what if things don't turn out that way? A deep cut to the Fed's bond-buying program
-- to $55 billion a month, for example -- could roil stock, bond and currency markets. But Bernanke's Fed prides itself on giving markets plenty of notice, so the odds of that happening seem slim. Germany's elections: Sept. 22. Rating: 2 Bernankes. From late 2009 until last year, worries that a European government would fail to pay its debts often sent the U.S. stock market into a tailspin. Germany's elections will likely push Europe's debt problems back into the spotlight, if only because of what happens afterward. Chancellor Angela Merkel's party currently leads in polls, so many investors are banking on Merkel getting a third term in office with a stronger government. The new German government is generally expected to take up sweeping reforms for the 17 countries that use the euro currency. That could easily lead to some public spats between government leaders, especially if Greece runs into trouble again. As a group, the countries of the eurozone make up the world's second-largest economy. So if things get heated, U.S. investors will take notice, says Mark Luschini, chief investment strategist at Janney Montgomery Scott. "That's likely to cause some volatility," he says. U.S. budget deadlines: Sept. 30. Rating: 5 Bernankes. To keep the government running, Congress needs to pass a short-term spending bill before the fiscal year starts Oct. 1. Any problem could lead to a government shutdown. But that's seen as a prologue to the main event -- another debt-ceiling standoff.
Last week, Treasury Secretary Jacob Lew warned that the government would lose the ability to pay all its bills by the middle of October unless lawmakers raise the government's $16.7 trillion borrowing limit ahead of time. John Boehner, the Republican Speaker of the House, said he plans to use the debt ceiling to demand deeper spending cuts and promised "a whale of a fight." The tough talk has reminded many in the financial markets of the debt-ceiling fight in August 2011, when markets plunged around the world. "Another standoff could spark a market riot," Luschini says. But, like many investors, he expects Congress to come around at the last minute. Things will turn out all right, eventually.
[Associated
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