US Treasury’s Bessent: Impact of government shutdown on economy is worsening

💡 DMK Insight

The looming federal shutdown is more than just a political headache—it’s a potential economic disruptor. As Treasury Secretary Scott Bessent highlighted, the effects are worsening, which could lead to increased volatility in both equity and forex markets. Traders should be wary of how this uncertainty may impact consumer confidence and spending, potentially leading to weaker economic indicators. If the shutdown drags on, we might see a flight to safety, pushing investors towards assets like gold or the US dollar, while riskier assets could take a hit. Keep an eye on the S&P 500 and major currency pairs like EUR/USD for signs of reaction. The real story here is how long this shutdown lasts; if it extends beyond a few weeks, expect to see significant shifts in market sentiment. Watch for key economic data releases during this period, as they could be overshadowed by the shutdown narrative. If the situation escalates, traders might want to consider hedging strategies or adjusting their positions in anticipation of increased market swings.