After the House of Representatives finally voted through a deal to raise the U.S. debt ceiling on Monday night, the expected exhalation of relief does not seem to have materialized as the Senate prepares to vote later on Tuesday.
While it looks as though a potentially disastrous default by the world's largest economy has been averted, worries over structural problems in the heavily indebted U.S. have not gone away.
"At some point we are going to have to take some bitter medicine and, the longer we wait, the harder it will be," Dodge Dorland, chairman and chief investment officer at Landor & Fuest Capital Managers, told CNBC Tuesday.
Unemployment is still historically high, with a 9.2 percent jobless rate.
And while the government has committed to $1.5 trillion in budget savings by late November, there has been no decision yet on where the axe will fall.
"Corporate America is in excellent shape, perhaps the best it has been in 50 years, but a sustained market rally will require unemployment numbers to come down," said Dorland.
"We are worried about structural problems in the US and the imbalance in the longer term," Jeremy Stretch, head of currency strategy at CIBC, told CNBC Tuesday.
"There are major structural issues which are not being closed down over time." The eyes of the Senate and the House of Representatives are on US presidential elections in 2012.
While a number of Republican candidates have put themselves forward to challenge President Barack Obama, there is no obvious frontrunner as yet, and the renegade Tea Party wing of the party appears to have more and more power.
"We are still in a scenario where we have very slow growth, high unemployment and that's very uncomfortable for politicians," said Stretch.
"It's taken us years to get into this scenario of over-leveraged markets and it's going to take a prolonged period to get out. For politicians, that's not palatable with elections coming up."
There has been renewed focus on whether the U.S. will be able to sustain the coveted AAA rating on its debt with credit ratings agencies. “We still take the view that the AAA credit rating of the U.S. is unsustainable in the medium to long term, and the question therefore becomes not if the U.S. will be downgraded, but when," Barings’ Nigel Sillis, Director of Research, Fixed Income & Currency team, wrote in a note.
"This is long anticipated however, and we believe it is unlikely to prove a shock to market participants."