US: Next government partial shutdown could take place in October - Wells Fargo


Analysts at Wells Fargo estimate that the Federal debt ceiling could be reached in early October. They explained that if the federal government does not have a budget in place and if no deal is reached, the government would enter a partial shutdown on October 1st. 

Key Quotes: 

“Our base case remains that the true “X date” will fall in the first week of October. But, the late August/early September period could bring the government very close to running out of cash.”

“The House of Representatives is scheduled to leave Washington, D.C. for its August recess on July 26, while the Senate is scheduled to finish up on August 2. Neither chamber is scheduled to return until Sept. 9, making it much more difficult for policymakers to react quickly if the “X date” ends up being closer than analysts currently expect.”

“Given the uncertainty, why not lift the debt ceiling before leaving town? Indeed, politicians on both sides of the aisle have stated that they do not want to put the full faith and credit of the U.S. government at risk. The challenge is that policymakers in both parties have a strong preference to tie a debt ceiling vote to a broader budget deal.”

“If the federal government does not have a budget in place past Sept. 30, and if no deal is reached by then, the government would enter a partial shutdown on Oct. 1, and large spending cuts would automatically take place a couple months later.”

“The uncertain fiscal outlook is one more factor likely to tilt the Fed towards a 25 bps rate cut at its meeting later this month.” 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD's range play continues ahead of Eurozone Consumer Confidence

EUR/USD remains directionless despite the drop in the US treasury yields. An above-forecast Eurozone Consumer Confidence will likely push the pair higher to the trendline falling from June highs. 

EUR/USD News

GBP/USD sits at 2-month tops ahead of key Brexit talks

Fresh optimism surrounding the Brexit deal propels GBP/USD to a two-month high. Brexit talks between the EU's chief negotiator Michel Barnier and UK Brexit Secretary Stephen Barclay will be the key.

GBP/USD News

USD/JPY: Bears eyeing break below 107.45

USD/JPY trades modestly flat, with the bias leaning to the downside, as we wind down into the close for the week following a data-heavy number of sessions which have left more questions unanswered and the outlook murky. 

USD/JPY News

Gold holds on to recovery gains amid trade/political pessimism

In addition to bouncing off multi-month-old rising trend-line, Gold gains support form recently downbeat trade/political headlines while taking the bids to $1,500 during Friday’s Asian session.

Gold News

Markets unmoved by Fed cut and pause

The Federal Reserve’s latest twist in monetary policy, reducing the fed funds for a second time in two months and then pausing for instructions has left markets without a clear direction on interest rates. Equites ended mixed.

Read more

Forex MAJORS

Cryptocurrencies

Signatures