The US government shutdown becomes the longest in history

Tuesday 15 January 2019

Research / Market

The current impasse, which is stemming from a political clash between the US President, unwilling to sign any budget resolution not including spending for Mexican wall ( budget of about $5.7 bn) and Democratic Party opposing this expense, is particularly of a concern as example of the policy risks lying ahead for the US Economy. In fact it opens the question on how it could be difficult for the new split Congress to address the looming debt ceiling (March 2019) and develop a coherent budget policy in a context where likely the US economy will decelerate this year. Moreover, albeit being a partial shutdown ( involving only a part of the federal agencies usually involved in a full government shutdown) the longer it lasts, the higher is the economic cost both in direct and indirect terms.

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