1,000 Market Pros Reveal What Will Happen If Washington DC Doesn't Defuse The Sequester

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Photo: Flickr / dkshots

On March 1, a large jolt of spending cuts will automatically take place, unless leaders in Washington find an alternative.Nobody thinks the spending cuts are a good policy, but the GOP might insist on them anyway, out of a feeling that they represent the only opportunity to get cuts.

Potomac Research Group has done a survey of 1000 financial industry pros, managers of pension funds, hedge funds, and money market funds, asking them what they believe will happen.

They’ve given us permission to show the results here.

Still, just over half of responders don't think the sequester will happen.

Even fewer foresee a government shutdown.

If the sequester is hit, expect a decline of 5-10% in the stock market.

Also if there's a government shutdown, expect a 5-10% Dow Jones decline.

People are worried about all of the above happening. After that, the next biggest worry is a downgrade.

Overall, people's outlook skews from neutral to optimistic.

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