As the deadline of October 1 approaches to avoid a government shutdown, the U.S. government is grappling with political brinkmanship that could disrupt federal funding. Senate negotiators from both political parties are making progress toward a short-term spending agreement aimed at preventing a shutdown.
Republican House Speaker Kevin McCarthy is facing a significant challenge as he navigates opposition from conservative groups and considers whether to bring a pending Senate spending deal to a vote in the House, according to Bloomberg.
Senate Republicans and Democrats are working out the details of a short-term spending measure to keep the government operational beyond October 1.
Moderate House Republicans, who want a bipartisan solution, are ready to use a rarely used procedure to force a vote on a temporary funding plan. However, this tactic is time-consuming and the deadline is less than a week away.
Moody’s Ratings, the last major credit rating agency to give the U.S. a top rating, has expressed concerns about the country’s institutional and governance strength amid the political turmoil. Moody’s stated that a government shutdown would be credit negative for the U.S. sovereign and would have a significant impact on organizations reliant on federal funding.
Meanwhile, Treasury yields continue to rise, with the 10-year bond hitting a yield of 4.56%, its highest level since October 2007. The 30-year bond has also seen increasing yields, reaching levels not seen since February 2011. Long-term Treasury notes have seen their market value shrink, indicating a potential third consecutive year of declines for the U.S. Treasury market.