The financial markets seem very complacent regarding the looming debt ceiling debate in the United States. I am however quite concerned and anticipate a period of sustained volatility during September and October, as the debate intensifies. If the “debt ceiling” were not raised in time, the government would run out of money to pay interest on the debt, write Social Security checks and make millions of other routine payments. I don’t see the US missing payments on Treasury debt, as that would be catastrophic, however, I suspect missing payments on social security would also be not taken kindly and could send financial markets into a tailspin. US House Minority Leader Nancy Pelosi has called for passage of a “clean” debt ceiling bill without any conditions. You can be sure there are enough Democrats who want to extract concessions from the Trump administration and enough Republicans who want to cut federal spending – that this could thwart raising the ceiling in time. US Senate majority leader Mitch McConnell likes to tout he has his troupes under control, but as we all know, he couldn’t get Trump’s Healthcare bill passed. Nothing about the performance of this Republican Congress to date offers any reason for optimism that it can now deal with this issue. Beware a sell-off in risk assets starting mid-September, if not before.