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Shutdown Deadline Looms: Why This One Could Rattle the Economy Differently

A partial U.S. government shutdown is increasingly likely by Friday at midnight, after negotiations were upended by political fallout from a fatal Minneapolis shooting involving federal agents. Senate Democrats, led by Chuck Schumer, say they will block funding that includes the Department of Homeland Security (DHS), meaning a unified Democratic caucus can stop the bill from advancing under the Senate’s 60-vote threshold.

This shutdown could play out differently than last fall’s record 43-day disruption because six of the 12 annual funding bills are already signed, and some departments (like Commerce and Agriculture) would remain funded—but others in the middle of the fight (including the Labor Department/BLS, which releases key jobs and inflation data, and agencies tied to airport operations) could be affected. Analysts warn another shutdown so soon could again delay federal paychecks, halt services, and distort or delay economic data, with betting markets quickly pricing in a high probability (around 80% as of Monday). Read More. 

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Is the World About to “Sell America”? The $27.6 Trillion Question

Reuters’ Jamie McGeever says talk of a renewed “Sell America” trade is back, driven by global unease over President Trump’s recent policy moves and their impact on alliances and the global order. The stakes are huge: the rest of the world is net “long the USA” by about $27.6 trillion—America’s record net international investment position—meaning overseas investors hold far more U.S. assets than Americans hold abroad.

A sudden rush for the exits is unlikely because the U.S. remains the deepest, most liquid market, and avoiding U.S. equities would also mean betting against many of the world’s most valuable companies. But McGeever argues markets may not need a mass exodus to feel pain: even a slowdown in foreign inflows could weaken U.S. asset prices and chip away at the “American exceptionalism” narrative. That matters because the U.S. still relies on sustained overseas capital to finance its deficit—roughly $1T+ a year—and keeping global investors willing to buy more U.S. assets could get harder amid geopolitical turbulence. Read More.