Expect worry over a US government shut down to begin again – September 30 funding deadline

<p>Remember all the folks screaming about how awful a US government shutdown and potential default would be?</p><p>And then Fitch listened and downgraded the US on governance worries?</p><p>And then all those folks screaming about a default laughed at Fitch? </p><p>Plonkers. </p><p>Anyway, here we go again. The upper house of the US Congress has returned to session, while the lower house comes back on September 12. </p><p>BoA analysts on what's ahead:</p><ul><li>Funding the government for next year is perhaps number one on its to do list as the fiscal year ends on September 30. Absent a funding bill or continuing resolution, the Government would shutdown at the end of the month. </li><li>As it stands today. we maintain our outlook for Congress to pass a continuing resolution averting a shutdown on October 1. With so little time before the fiscal year is up. leaders from both parties have signaled that a continuing resolution would likely be needed to avoid a shutdown and provide more time to finalize appropriations. Indeed, even House Speaker Kevin McCarthy (R-CA) has voiced support for a stopgap bill.</li></ul><p>Which all sounds encouraging, right? BoA is not so sure, saying that the likelihood of a shutdown is:</p><ul><li>close to a coin flip </li><li>While party leaders have publicly supported using a continuing resolution to avoid a shutdown, not all members of Congress are on board. Critically, the House Freedom Caucus—a group of about three dozen conservative Republicans—has said they would only support a continuing resolution that includes the Secure the Border Act of 2023 and other demands that are likely non-starters in the Senate. Given Republicans slim majority in the House, the stance of the House Freedom Caucus greatly increases the risk of a government shutdown, in our view. </li><li>
If there is a shutdown, we expect it to be brief</li></ul><p>Here we go again … </p>

This article was written by Eamonn Sheridan at www.forexlive.com.