Could a Shutdown Happen? It’s possible that Trump,

Could a Shutdown Happen? It’s possible that Trump, Powell and government officials will manage the crisis “to some extent” again, but it’s hard to guarantee that it’s handled “smoothly” as it has in the past. Here’s why:

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✅ How did you respond in the past?

During the Trump administration (especially the 2018-2019 shutdown): There was the longest shutdown, but it eventually resumed on a short-term budget, and Trump reached a compromise, maintaining a message aimed at his political base.

POWELL (Fed Chair): Interest rate policies and liquidity supply have played an important role in stabilizing financial markets. In particular, when the economy faltered as it did during the pandemic, there have been instances of quickly calming the market by measures such as rate cuts and bond purchases.

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⚠️ There is a difference this time

1. Political polarization is worse than in the past

The conflict between Trump and the Democrats is extreme, and the shutdown itself seems to be “political weaponization.”

Rather than negotiating the budget bill, the character of “fighting hard” has become stronger ahead of the presidential election.

2. Powell’s role is limited

The Fed can’t stop the shutdown itself. Fiscal is a congressional power.

Rather, it is difficult to immediately cut interest rates even if the economy slows due to the shutdown because both prices and interest rates must be considered.

3. weak economic conditions

Several indicators are already showing “economic fatigue,” including slowing consumption and falling manufacturing PMI.

In this situation, if the government shutdown overlaps, the shock can be felt even greater.

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🔍 Conclusion

The combination of “Trump + Powell + Government Bureaucrats” has been somewhat effective in the past, but this time there are more structural constraints and greater political risks.

Even if there is a shutdown, the damage may be limited in the short term, but market turmoil and economic contraction may be visible in the event of a prolonged period.

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