What Is a Government Shutdown, and Why Is the US Threatened with Another One?
The United States is once again on the brink of a government shutdown—a situation in which some federal government activities are halted due to a lack of a budget agreement. This shutdown could happen soon if President Donald Trump and Congress fail to reach a deal before the funding deadline expires Tuesday night (US time).
A shutdown occurs when Congress fails to approve an annual budget or at least a continuing resolution to keep the government operating. Without it, non-essential agencies like the statistical service, national parks, or federal research would be temporarily shut down, and hundreds of thousands of federal employees would not receive their salaries until funding is approved.
The current situation is escalating due to political tensions in Washington. Republicans, who control the House of Representatives, want to cut government spending, while Democrats insist on maintaining funding for social programs. President Trump even canceled a meeting with Democratic leaders, calling their proposals "not serious." Negotiations are increasingly deadlocked as time ticks down.
The impact is not only being felt in the US but is also shaking global markets. This uncertainty has weakened the US dollar, driven investors into safe-haven assets like gold, and could delay the release of important economic data like the monthly jobs report (Nonfarm Payrolls), which typically serves as a key guide for the Fed's policy direction.
This uncertainty has had a direct impact on commodity markets. Gold and silver prices have surged as investors seek safe havens amid political risks and the possibility of a more dovish Fed stance if economic data is delayed. Oil prices have been depressed, as markets worry that a shutdown will disrupt US economic activity and suppress energy demand. With these three commodities moving in opposite directions, global markets are now focused squarely on the progress of negotiations in Washington.
Why Is a Shutdown Threatened to Happen Now (September 2025)?
1. The US government will run out of funds by Tuesday evening (local time) if no new budget agreement is reached.
2. President Trump and Republicans in Congress are at odds with Democrats over the size of the budget and its allocation. Democrats want to maintain funding for social programs, while the Trump camp wants to implement significant spending cuts.
3. Trump also recently canceled a meeting with Democratic leaders, deeming their proposal "not serious."
What are the impacts of the shutdown?
1. Federal employees will be temporarily unpaid.
2. Public services (such as national parks, research, and statistical agencies) will be temporarily closed.
3. Important economic data, such as the highly anticipated Nonfarm Payrolls report, could be delayed.
4. It could erode investor confidence, unsettle financial markets, and put pressure on the US dollar.
Source: Newsmaker.id
