Trump to Pause Government Shutdown, Stocks and USD Shrug
- President Trump announces bipartisan agreement to end US government shutdown
- The stopgap spending bill will temporarily fund the government through February 15
- If long term deal not reached by then, Trump threatens shutdown relapse and state of emergency to fund border wall
After a 35-day shutdown, President Trump and Congress have reached a temporary agreement to re-open the US Government. The short-term stopgap spending bill, which does not include funds for building a wall at the Southern border, will reportedly keep the government funded for the next 3-weeks through February 15.
The President of the United States said he sees congress setting partisanship aside and putting the security of the American people first. Trump added “we are for complete border security and having borders will be an important part of the solution” and that the coming days will provide republicans and democrats the opportunity “to work together for the benefit of our whole beautiful wonderful nation.”
Stocks and the USD registered muted reactions while the President spoke at the White House likely due to speculation already accounting for and pricing in the news prior to Trump taking the podium.
US DOLLAR INDEX PRICE CHART: 1-MINUTE TIME FRAME (JANUARY 25, 2019 INTRADAY)
US S&P500 INDEX PRICE CHART: 5-MINUTE TIME FRAME (JANUARY 25, 2019 INTRADAY)
The announcement made by President Trump earlier today followed a flare-up at New York’s LaGuardia Airport, one of the busiest travel hubs in the country. After furloughed federal employees missed pay from the enduring shutdown, the FAA publicized that it had to halt flights at LaGuardia in addition to significant delays building up at other airports due to a shortage of air traffic control workers. ATC and TSA employees were just a segment of the roughly 800,000 federal workers impacted by the shutdown.
Several leaders in the finance community began professing the adverse impact the government shutdown could have on the US economy which seems to be losing its strong momentum. As the shutdown progressed, pressure continued to build on politicians to set aside party lines and come to a bipartisan agreement.
In President Trump’s speech, he thanked federal workers for showing “extraordinary devotion” and ensured backpay will “happen fast.” Trump also ordered Senator Mitch McConnell to put the funding proposal to vote on the floor immediately and said approving the bill is “absolutely vital” to securing our southern border and ensuring safety of Americans.
Most notably, President Trump stated “We really have no choice but to build a powerful wall or steel barrier. If we do not get a fair deal from congress, the government will either shut down again or I will use the powers afforded to me under the laws of the constitution of the United States to address this emergency.” This could be why the stock market and US Dollar are not responding to the news as the stopgap bill can be viewed simply as ‘kicking the can down the road.’
Written by Rich Dvorak, Junior Analyst for DailyFX
Follow on Twitter @RichDvorakFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.