With the fight over the U.S. debt ceiling finally over, investors are free again to focus on all the economic challenges that lie ahead, but they are finding little reason to celebrate. Stock markets around the world fell sharply on Tuesday, skipping the "relief rally" that customarily follows the resolution of a crisis.
In the United States, signs of a serious economic slowdown had been building up, though with attention focused on the debt-ceiling debate, the news had apparently not yet sunk in.
The U.S. economy, as measured by gross domestic product, barely grew in the first two quarters, manufacturing slumped and consumer spending fell in June for the first time in nearly two years. The stalemate over the debt ceiling only aggravated what was already a bad situation.
"Our economy didn't need Washington to come along with a manufactured crisis to make things worse," said President Obama, commenting on the approval of a new debt ceiling. He offered little hope for a quick recovery.