The risk of a U.S. government shutdown intensifies, Deutsche Bank: Investor sentiment is heavily suppressed

According to the Zhitong Finance APP, Chuck Schumer, the Senate Minority Leader and Democratic Senator from New York, stated on Wednesday that Democrats will reject the government funding bill passed by Republicans in the House of Representatives, leaving uncertainty about whether Congress can avoid a government shutdown before the Friday midnight deadline.

The research department of Deutsche Bank pointed out in a report that the risk of a government shutdown facing the U.S. government is dampening investors' risk appetite and weakening the market optimism that had previously arisen from U.S. inflation data coming in lower than expected. "The next key point is the potential government shutdown this Saturday; if moderate Democratic senators in the Senate fail to support the temporary funding bill proposed by Republicans, a government shutdown will be inevitable."

As of the time of publication, U.S. stock markets were broadly down, with the Dow Jones falling 0.36%, the Nasdaq down 0.91%, and the S&P 500 index down 0.46%. Bitcoin dropped 1.9%, while spot gold once again surged to a historic high, reaching a new record of $2,956.91 per ounce, up 0.8% on the day.

The House of Representatives passed a temporary funding resolution on Tuesday by a narrow margin, allowing the government to continue operating until the end of September. However, Schumer criticized, stating, "Government funding should be a bipartisan process, but Republicans chose party conflict and drafted the funding resolution without any Democratic input. Therefore, Republicans do not have enough votes in the Senate to pass the House version of the funding bill."

Schumer called for the passage of a one-month temporary funding bill to give both sides more time to negotiate a longer-term agreement. He stated, "Our caucus is united in supporting a clean temporary funding bill for April 11, which will keep the government operating normally and give Congress time to negotiate a viable bipartisan legislation. I hope our Republican colleagues will join us in avoiding a government shutdown on Friday."

During Wednesday's Democratic senator lunch meeting, there were differing opinions among senators on whether to support the six-month funding bill passed by the House. Some senators expressed concerns that, despite their general disapproval of the House bill, the consequences of a government shutdown could be more severe.

"Frankly, either outcome is bad for the average person," said Democratic Senator Raphael Warnock from Georgia. "If the bill passes, it will harm ordinary people; if the government shuts down, it will also have negative effects on ordinary people. Therefore, we find ourselves in a dilemma."

Some Democratic senators believe that the House bill reflects an expansion of executive power, disrespecting Congress's authority over fiscal appropriations. "Another reason I oppose this bill is that it promotes the improper expansion of executive power, while Congress should hold the financial authority," Warnock added.

Currently, Republicans hold 53 seats in the Senate but need at least 60 votes to overcome a filibuster. Senate Democrats believe that the House bill was not negotiated with them, and if they support it hastily, it will set a bad precedent for the future.

Democratic Senator Mark Kelly from Arizona stated, "If we support this bill, we are essentially telling House Republicans that they can create government funding plans without Democratic involvement." Senate Majority Leader John Thune pointed out that he is willing to discuss the possibility of voting on amendments to a temporary funding bill with Democrats. "Right now, they are still trying to figure out how they want to move forward," Thune told reporters, "but ultimately, our viable option is the temporary funding bill from the House of Representatives."

The House of Representatives has already adjourned and is not expected to reconvene until March 24. This means the Senate cannot make any changes to the bill, or it will result in the government officially shutting down after midnight on Friday.

After the Democratic internal meeting on Wednesday, senators still could not reach a consensus on the vote. "As it stands, there are not enough votes," said Maryland Democratic Senator Chris Van Hollen. "Based on the situation at the end of the meeting, I do not believe the Senate can pass the House version at this stage."