Congress may be the market's 'worst nightmare': Blitzer
The debt ceiling debate this fall in Congress may have markets worried, although the worst nightmare—a U.S. default—is likely to be avoided, but only at the last minute, S&P 500 Index committee chief David Blitzer told CNBC on Monday.
"The big issue is the debt ceiling, the budget deficit, the U.S. Congress," Blitzer said in a "Squawk Box" interview. "It's the whole fiscal policy side that's the huge problem. At this point, it looks like a nasty standoff. Nobody wants to give anything. The clock is ticking on the debt ceiling. I don't think we're going to default but I think we're going to have one of these crazy 11th-hour skirmishes."
"Everybody will decide the U.S. Congress is even worse than their worst nightmare and the markets will get hit as a result," Blitzer added. "It'll be worse than the J.C. Penney board situation because there will be 535 of them." (Read more: JC Penney board erupts into fight over next CEO)
Out of everything, Blitzer said that issues with the debt ceiling are the most important, and the problem is that the market doesn't have an exact date to focus on. However, he expects that the effects will be felt most harshly in the short term and when the situation passes, the economy will improve despite Washington.
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"If we assume, as I do, that at the great standoff that the U.S. will not default … we'll come out the other side reasonably well," he said. "Looking forward I think we'll make it but it's going to be a very messy September/October period."