Market Alert: Government Shutdown in 6 Days?
History shows that government shutdowns can have significant market impacts. The last shutdown pushed gold and silver to new all-time highs, while equities faced heightened risk.
If you hold stocks or other assets, exercise caution—data transparency will disappear, creating uncertainty across markets.
Key Risks to Watch:
1️⃣ Data Blackout: No CPI or jobs reports. The Fed and risk models lose visibility, forcing volatility (VIX) to adjust higher.
2️⃣ Collateral Shock: Previous credit warnings indicate a shutdown could trigger downgrades, spiking repo margins and reducing liquidity.
3️⃣ Liquidity Freeze: With the RRP buffer depleted, dealers hoarding cash could cause funding markets to seize.
4️⃣ Recession Risk: Each week of shutdown can reduce GDP by ~0.2%, potentially tipping a slowing economy into a technical recession.
Historical Insight:
During the March 2020 funding stress, the SOFR-IOBR spread widened sharply, signaling private market cash shortages despite the Fed holding ample reserves. Watching this spread now could indicate similar stress.
Stay alert and manage exposure carefully. I’ll provide timely updates as the situation develops.PLEASE FOLLOW BDV7071.#MarketAlert #GovernmentShutdown #Gold #Silver $BTC
