Lee JuCom
Lee JuCom2025-10-01 12:00

🟠 Let's break down what a government shutdown actually is and why it matters now.

What it means?

A government shutdown occurs when the US Congress fails to pass a budget to fund federal agencies. Without a spending bill, government departments are shut down, workers are furloughed, and the release of important economic data (like inflation or NFP) is delayed.

Why now?

October 1 marks the new fiscal year, and if lawmakers can't agree, a government shutdown will begin. That's exactly what happened — the shutdown has begun. Democrats are pushing for social programs and benefits, while Republicans — led by Trump — want a "clean" funding bill without those costs. For Trump, it’s also a political weapon: to pressure Democrats, create gridlock, and show toughness.

Market Impact:

🟡 Economic Data: Delayed data means the Fed is acting rashly, making rate decisions less predictable.

🟡 Volatility Premium: Investors demand more safety → volatility spikes.

🟡 Economy: Each week of government shutdown costs about 0.1–0.2% of GDP.

🟡 Assets: Gold typically rallies, stocks tumble, and the dollar reacts nervously.

Cryptocurrency:

🟡 Short-term: the government shutdown could put pressure on risk assets, including Bitcoin, as investors reduce risk.

🟡 Long term: Ironically, government dysfunction often strengthens the argument for decentralized assets. Plus, if the Fed sees a weaker economy, more rate cuts are likely — which means more liquidity flowing into the market.

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Lee JuCom

2025-10-01 12:01

🟠 Let's break down what a government shutdown actually is and why it matters now.

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