The federal government has shut down at the stroke of midnight Friday, 19th Jan 2018: U.S.time zone). That has halted all but the most essential operations ; an immediate fall out of this is the spoiling of Donald Trump’s first year celebrations, for which he had planned to depart to his ‘Mar-a-Lago’ club, where he was to participate in high-dollar fundraising program to commemorate the completion of his first year of being office.
In case the Congress can’t reach a deal on continuing resolution, the U.S. government will face a potential shutdown the effect of which is “non-essential” services provided by information bureaus, national parks, as well as other employees across the federal government will close. Essential operations pertaining to national security, law and order, and emergency life-and-death services will continue to function, as will agencies and services that are not funded through congressional appropriations. This includes immigration and border patrol, the US Postal Service and special counsel Robert Mueller’s office.
Late hour and last-minute negotiations did not yield any positive results as Senate Democrats blocked a four-week stopgap extension in a late-night vote, causing the fourth government shutdown in a quarter century. Behind the scenes parleys, however, leading Republicans and Democrats were trying to work out a compromise to avert a lengthy shutdown.
Nonetheless, Wall Street shrugged off by choosing to climb to record levels, with the main stock indices enjoying a third successive week of gains, as participants appeared unfazed by the risk of the shutdown.
This, however, was not the case with the foreign exchange markets with the dollar index struggling to stay afloat of a three-year against a basket of peer currencies.
This is in contrast to the last government shut down that took for 16 days in October, 2013, which brought a sharp fall in the S&P 500.
In effect, the stock and bond yields moved in the oppoite directions with the gold prices in the commodity space pushed up by $5 to $1332 an ounce, even though still gold is not glittering for the reason the precious metal is down by $6 over the week.