Home Economy How The Market Might React To The Situation In Washington

How The Market Might React To The Situation In Washington

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A lot of Wall Street types are keeping an eye on how Washington acts regarding the potential for a government shutdown later this week. This has been something that had the potential to happen for some time now, but it is growing increasingly likely by the day.

Members of Congress from both the far Right and the far Left are not pleased with the budget deal that has been struck up to this point. There are concerns about how the funding is allocated, and there are concerns about immigration and other issues as well. Basically, everyone is focused on some part of the bill that they do not like at this point. That leaves little room for those who are actually encouraged by this bill.

CNBC reports that it is important to pay attention to how different assets react if there really is a government shutdown. They point out the fact that currencies are the most likely to react first. They tend to respond to these geo-political issues more rapidly than do other assets. If you see something like the dollar falling in value versus other currencies, then perhaps you ought to trade your other assets in accordance with that move.

U.S. equities are at all-time highs at the moment, but some say that there is a lot of hot air in that balloon. An event like the budget not passing could be enough to start to pop it. Many people think that a government shutdown is not going to happen at all, but can we really be so sure of that? It does seem like there is potential that this may in fact happen. If it does, who is going to be left holding the bag?

The President is said to support a short-term funding deal to get past this crisis without a government shutdown. Still, there are a lot of politicians who are posturing about how they will vote on this one. Some are definitely “no” votes on this, and others seem ready to possibly jump in as “no” votes as well depending on what the final deal really looks like.

It is still unclear if the Congress has enough votes to pass this bill or not. They are still searching for votes even as we speak. If they cannot get a bill passed and on the President’s desk by midnight on Friday, then the government will have run out of money to continue to pay its bills.

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