14 Jan Federal Shutdown Becomes Longest in U.S. History
With the Federal government shutdown now exceeding the longest shut down in U.S. history, Republican and Democratic leaders appear no closer to a resolve than before the shutdown occurred.
As President Trump considers bypassing the system by using emergency powers to theoretically fund the wall, many are saying that will only end up being challenged in the courts and will not lead to the wall being funded. This outcome is being echoed by republicans as well as democrats. With federal employees’ livelihoods remaining in the balance, there will hopefully be a mutual agreement made here soon. The challenge is that both sides have said there is no chance of them backing down. Without a compromise, the U.S. economy will soon experience major challenges as the shutdown continues. The positive for mortgage interest rates is that the longer the shutdown lasts, we should see mortgage rates continue to soften.
The stock market is falling this morning, creating a negative technical outlook that could lead to further losses in the near term. The interesting thing about the charts is that stocks have recovered approximately half of the massive losses they took in November and December. This means that the correction could just be a healthy part of a broader bearish market move in the stock market. If that is in fact the case, we will see signs of more losses to come in the coming days. I will keep you posted each day as this unfolds. Of course, that would mean good news for mortgage interest rates, which generally benefit during times of a struggling stock market.
Although we may see improvements in the days to come, it’s too early to make that call. We will maintain our locking bias for now.