As the government shutdown now being colloquially known as the ‘Trump Shutdown’ continues into its nineteenth day, American traders and stock market investors are warning about the President plunging the economy into ‘chaos’ and sending stock markets falling dramatically.
Top Democrats Nancy Pelosi and Chuck Schumer met with the President and Vice President before Christmas to discuss how to keep the stock markets running whilst the government was shut down, but the President made it clear he was not going to change his position. A similar meeting more recently lasted just 14 minutes with neither side willing to budge.
There have been growing warning signs that the stock market could be in for a major downturn in the coming days and weeks: well-performing investors have noticed a significant decrease in share price, for one.
On a judicial level, the Federal Reserve’s ‘plunge protection team’ are to discuss how to salvage the tanking market, something that hasn’t been done since the lead up to the 1987 Recession. This crisis call has done little to quell the markets and, with more uncertainty surrounding the President’s threats to fire more his own staff, investors have waning confidence in continued investments.
Another casualty has been the opening few days of the American stock market. Officials on Wall Street, investors and policymakers are unsure of market trends and other key data. With the shutdown making the markets weaker, and a drop in government spending, investors are calculating that the risk is simply too high.
With no end in sight for the shutdown, it’s likely that the United States will be seeing an increasingly volatile stock market. The shutdown shows no signs of stopping, and has surpassed the longest shutdown in recorded American history, which took place under Bill Clinton in 1995-1996.
No End In Sight
The US Government is currently shut down, leaving over 800,000 federal employees without work and without pay, due to the President being unable to secure funding for his border wall. His $5 billion demand for border wall funding has resulted in clashes with the Democrats and petulant refusals for negotiation from the President. Time will only tell if this situation gets worse and what kind of catastrophic effect that might have on the US economy.