Ignore the red herrings; the real risk is the economy

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Return of the 2 percent yield: Billion-dollar manager

The market is contending with several scary scenarios that have put a serious crimp in the stock rally. The idea that the U.S. could carry out military strikes on Syria, combined with renewed pessimism about the debt ceiling debate, led the S&P 500 to drop over 1.5 percent Tuesday.

But Krishna Memani, OppenheimerFunds chief investment officer of fixed income, said such concerns are little more than red herrings. The real problem, he cautions, is slow economic growth.

Concerns about the debt ceiling came to the fore on Tuesday, when Treasury Secretary Jack Lew wrote a letter to congressional leaders saying that the U.S. will hit it in mid-October. When that happens, the government will not be able to issue more debt without authorization from Congress. And given how divisive that body has become, even another short-term authorization to keep the government functioning is not counted as a sure thing.

Lew's comments on "Squawk Box" didn't indicate that a compromise is imminent.

"We're not going to be negotiating over the debt limit," Lew said. "Congress has already authorized funding, committed us to make expenditures. … The only question is, will we pay the bills that the United States has incurred?"

(Read more: Lew: Obama not negotiating over debt limit)

Meanwhile, many Republicans have said that they would not vote for a bill avoiding a shutdown without the (unlikely) concession of defunding Obamacare. As Sen. Ted Cruz (R-Tex.) recently put it, "If you have an impasse, one side or the other has to blink. How do we win this fight? Don't blink."

Memani downplays the White House and Republican rhetoric.

"If they don't compromise, then that clearly is bad for the economy," the fund manager said. "But it don't think that's really a base-case scenario, because we have seen this movie several times before."

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