#TrumpWarnsSeptemberShutdown

Trump: Government May Shutdown In September; Uncertainty Returns To Markets As Parties Remain Far Apart Political uncertainty once again dominates sentiment among investors, with remarks from Donald Trump signaling that a government shutdown in September is possible as partisan fighting continues over spending priorities. The House of Representatives have already passed their funding bill that would temporarily fund the government until December 4, to stop a shutdown taking effect before midterms. This has now moved to the Senate where Republicans and Democrats are trying to figure out the next moves, before a bill must be signed by 30 September.

Failure could mean numerous government agencies would be temporarily shut down, creating uncertainty in various sectors around the world for investors and businesses that rely on those agencies.

The shutdown has the potential to cause some short-term fluctuations in markets, as investors seek to adjust accordingly and protect their portfolios against such developments, particularly given its proximity to the debt-ceiling saga. The global investors' primary worry would not only be the shutdown in the U.S., but how this could spill over to gridlock that is perceived to have prolonged and potentially detrimental impact to the global economy. Some market observers fear the situation could also drive up risk-off trading, at the expense of cryptocurrencies. However, there are still reasons to believe such an event may have limited, long-term effect.

Over past such shutdowns, markets often bounce back relatively quickly once agreement is reached in Washington.

As the critical deadline approached, market participants will continue closely monitoring the developments on Capitol Hill Do you believe a US government shut down would be purely short-term, or is there a higher probability it would significantly increase the global risks?

‍#USPolitics #MarketRisk #GateSquare