US Government Shutdown Now In Joint Place For Second Longest Closure
Trump Remains Adamant On Wall Funding Demands
Trump Looking For $5.7 Billion
The US government shutdown has now rolled through its eighteenth day making this current gridlock tied in second place for the longest ever shutdown.
The shutdown began due to the failure between President Trump and the Democratic Party to reach an agreement on the allocation of funds to build a wall along the southern US border, an issue which Trump has been pushing since his election campaign.
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Trump is pushing for $5.7 billion to be added to the new federal spending legislation which needed to be approved and passed by December 21st.
However, following strong opposition by the Democrats, Trump’s demand was turned down. In turn, Trump refused to abandon his demand and on December 22nd, the government went into shutdown.
Trump Sticks to His Guns Over The Wall
The issue of the Mexican border has been a staple in Trump’s election campaign as well during his time as President, and is certainly his most controversial policy point.
While Trump has already built a portion of his wall, he is now looking for federal funding to complete it. In the process, he has made many highly provocative speeches and public comments highlighting the need to protect the US border from the influx of southern American migrants, who began travelling towards the US at the end of last year, fleeing the violence and poverty of their own nations.
Speaking during a televised address yesterday, Trump referred to the border situation as:
“A humanitarian crisis, a crisis of the heart and a crisis of the soul.”
However, Trump has come under widespread criticism and scorn for his handling of migrants attempting to cross the US border including the separation of families in detention centers.
The prospect of Trump abandoning his demand and/or reaching a compromise with Democrats seems highly unlikely. Ahead of the shutdown, Trump told top Democrats during a meeting that he would be “proud” to shut down the government for “border security” and warned that he would be prepared to keep the government shutdown for years as he would “look foolish.”
Democrats Slam “Immoral” Trump
The opposition from Democrats has been staunch and widespread with Speaker of the House, Nancy Pelosi, calling Trump’s wall “immoral.” The Democrats have said they are willing to fund security measures which do not include the wall but are not prepared to fund Trump’s highly controversial project.
Speaking with MSNBC soon after the Democrats took control of the House of Representatives, Pelosi told reporters that the Democrats were seeking to separate the issue of the wall and government funding saying:
“The wall and the government shutdown really have nothing to do with each other.”
Pelosi also added that Trump allowing people to think so was “totally irresponsible” saying that “there is no reason to have workers pay a price with their paycheck.”
Finally, Pelosi told reporters that the President:
“Must stop holding the American people hostage, must stop manufacturing a crisis and must reopen the government.”
For now, it seems the market is shrugging off the gridlock. If anything, political trouble in the US adds further conviction to the view that the Fed will keep rates on hold, allowing equity traders further room to run.
The recovery rally in the S&P continues to storm higher with price now firmly above the 2530.70 and 2551.87 and well on its way to testing the key 2604.37 level. Above there, the 50% retracement from last year’s highs is the key level to watch which also sits alongside a raft of prior swing lows offering strong confluence.