TENNESSEE VALLEY (WHNT) – When president Barack Obama signed sequestration into effect a week ago, many expected stocks to take a dive. But according to economics professor Barbara Jones, the lack of confidence in a solution, led investors to prepare.
“I think that as we have gone through these various debt ceiling crisis where it seemed at one point where the whole government was going to go into collapse, then the whole thing with the fiscal cliff and sequestration. I think people are not as inclined to panic,” said Jones.
Lawmakers have promised to work to find a solution before the impact of the cuts is really felt later this month.
Jones believes that and other economic bright spots may have softened the blow.
“The housing prices went up, that’s very positive. Then you’ve got consumer confidence is up, we’ve got encouraging words from the Fed,” said Jones.
Still, Jones says investors`positive outlook could change if they lose all hope for compromise on capitol hill.
“But it may not be a plunge, because these other factors that are happening in the economy that are positive will continue,” Jones says.