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Puerto Rico's bonds in the balance

The White House is sending out mixed signals on how it wants to handle Puerto Rico's $74 billion in municipal debt, which has become an even more pressing issue in the aftermath of Hurricane Maria. And the confusion pushed Puerto Rico benchmark bond prices even lower.

Data: S&P Dow Jones Indices; Chart: Andrew Witherspoon / Axios
  • President Trump on Tuesday to Fox News: "You know, they owe a lot of money to your friends on Wall Street, and we're going to have to wipe that out. You can say goodbye to that."
  • White House OMB Director Mick Mulvaney on Wednesday to Bloomberg: "We are not going to pay off those debts. We are not going to bail out those bondholders."

Why it matters: Puerto Rico officials have said the government could shut down at the end of October if Congress doesn't provide billions of dollars in emergency funding. But the long-term recovery needs would be much different were Puerto Rico's debt to be wiped out, as Trump initially suggested.