As the US Congress has been unable to agree on the conditions under which the state will finance new programmes, the country is in a situation where it will no longer have the means to operate and ensure its normal functioning: a shutdown.
The implications will be numerous: the White House intends to use this temporary halt in certain activities as a means of assessing how essential these activities are.
A test for public services
Services considered non-essential are therefore likely to see their activity strongly impacted, or even stopped suddenly; in some cases, they may not resume in the same form or with reduced staff. On the other hand, other sectors deemed essential (health, police, border control, etc.) should continue to operate normally, even if salaries are likely to be delayed.
Naturally, this will impact the income of the civil servants and agents concerned, as well as their ability to spend. More broadly, consumer morale could be affected.
Investors will also regret a deterioration in the quality (and even availability) of US economic indicators, due to expected disruptions in the functioning of statistical agencies.
This makes the economic outlook even less transparent at a time of uncertainty.
Naturally, all this will weigh on the stock market, which does not appreciate such a lack of visibility. But the real impact should remain manageable.
Trust unchanged in the country
The United States is used to shutdowns. While they have not experienced such a reality since 2018 (that year, the country had three shutdowns lasting a total of 39 days), the country has experienced this same phenomenon 15 times since the early '80s.
The markets are used to these manoeuvres. The country retains the confidence of investors, and its ability to finance itself is therefore a result of political manoeuvres.
Investors will not be easily intimidated. This is not the time for panic or disengagement from US financial assets, which continue to hold a significant place in our portfolio.