More Videos:

Rates from

  • Mortgage
  • Credit Cards
  • Auto

[video] Quick Take: Washington Flattens Stocks

NEW YORK (TheStreet) -- Now that the markets have digested the Federal Reserve's tapering decision, it can focus on something else: The debt ceiling debate.

TheStreet's Debra Borchardt spoke to Peter Cardillo, chief market economist for Rockwell Global Capital, who said the market will probably pull back while the Congress continues to debate whether to raise the debt ceiling or balance the budget before the fiscal year begins Oct. 1.

With equities near all-time highs, the expected pullback isn't all that surprising, especially since this isn't the first time we've seen a debt ceiling circus, Cardillo said.

In the end, Cardillo said the government will pay its bills and raise the debt limit. This is nothing new. He added that about 10 years ago the government actually shut down for a day, but he doesn't think it'll go that far this time.

One of the big discussions is over cutting the $40 billion food stamps program, something the Republicans want. Cardillo said the program will likely be trimmed, but not cut altogether.

He concluded the Fed didn't want to taper its bond buying due to the fear of chaotic bond selling, which would drive up rates, as was evident in the summer.

-- Written by Bret Kenwell in Petoskey, Mich.