Bear in mind all the oldsters screaming about how terrible a US authorities shutdown and potential default can be?
After which Fitch listened and downgraded the US on governance worries?
After which all these of us screaming a couple of default laughed at Fitch?
Plonkers.
Anyway, right here we go once more. The higher home of the US Congress has returned to session, whereas the decrease home comes again on September 12.
BoA analysts on what’s forward:
- Funding the federal government for subsequent 12 months is maybe primary on its to do record because the fiscal 12 months ends on September 30. Absent a funding invoice or persevering with decision, the Authorities would shutdown on the finish of the month.
- Because it stands at present. we preserve our outlook for Congress to move a seamless decision averting a shutdown on October 1. With so little time earlier than the fiscal 12 months is up. leaders from each events have signaled {that a} persevering with decision would doubtless be wanted to keep away from a shutdown and supply extra time to finalize appropriations. Certainly, even Home Speaker Kevin McCarthy (R-CA) has voiced assist for a stopgap invoice.
Which all sounds encouraging, proper? BoA is just not so certain, saying that the chance of a shutdown is:
- near a coin flip
- Whereas celebration leaders have publicly supported utilizing a seamless decision to keep away from a shutdown, not all members of Congress are on board. Critically, the Home Freedom Caucus—a gaggle of about three dozen conservative Republicans—has stated they might solely assist a seamless decision that features the Safe the Border Act of 2023 and different calls for which are doubtless non-starters within the Senate. Given Republicans slim majority within the Home, the stance of the Home Freedom Caucus enormously will increase the chance of a authorities shutdown, in our view.
If there’s a shutdown, we count on it to be transient
Right here we go once more …
