Senate Democratic Leader Chuck Schumer announced late Thursday that he plans to vote to keep the government open as the chamber prepares to take up a GOP stopgap bill continuing government funding Friday.
Key quotes
I believe it is my job to make the best choice for the country, to minimize the harm to the American people.
Therefore, I will vote to keep the government open, and not shut it down.
While the Republican bill is very bad, the potential for a shutdown has consequences for America that are much much worse. For sure, the Republican bill is a terrible option.
It is not a clean CR” or continuing resolution.
It is deeply partisan. It doesn’t address far too many of this country’s needs, but I believe allowing Donald Trump to take even much more power in a government shutdown is a far worse option.
Trump has taken a blowtorch to our country and wielded chaos like a weapon.
For Donald Trump, a shutdown would be a gift. It would be the best distraction he could ask for from his awful agenda.
Market reaction
At the time of press, the US Dollar Index was down 0.03% on the day at 103.81.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
