Flashback to September 28, 2018:
President Trump on Friday signed an $854 billion spending package that will avert a shutdown by keeping the federal government open into the new fiscal year, which begins Monday.
The measure fully funds most parts of the federal government through fiscal 2019, pushing off a deadline for a partial shutdown — and showdown over funding for Trump's proposed border wall — until early December.
“The signing of this legislation marks a drastic turnaround in the way we have funded the government in recent years," said Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) in a statement announcing the signing. "As of today, 75 percent of the government is funded — on time and through an open, bipartisan process.” ...
[A]fter March 1, the government will need to take "extraordinary measures" to avoid defaulting, and those measures will last for a few months. Ordinary investors should be aware that in 2013, the last time it looked as though Congress might not raise the limit, the market avoided Treasury securities that matured around the dates when the government projected it would exhaust the extraordinary measures.
So, looking ahead, ordinary investors shouldn't be surprised if we see an increase in rates and a decline in liquidity if it looks like the debt ceiling fight is going to be dramatic again. The current state of the shutdown may presage such drama.
