The US avoided a shutdown for 45 days: Congress and the Senate supported the government funding project, which was quickly signed by President Biden. There is no aid to Ukraine yet, but a separate draft law is being prepared. Democrats are trying to increase funding for Ukraine and disaster relief, but are facing resistance from Republicans.
Barron's examines why the current government shutdown could become painful:
- Investors may not ignore it due to the possible delay of the negotiation process before the elections.
- About 800,000 state employees can be sent on vacation, and other thousands will work without pay.
- Unpaid working hours can affect economic costs.
- There is no clear deadline for agreement and disagreements are not obvious.
- At the same time, the economy is facing problems with oil, student loans and strikes.
- The closed government continues, the Fed does not receive the necessary economic data. We will monitor the development of the situation.