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Itching for a Fight

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Itching for a Fight

Author: Greg Valliere

September 15, 2023

AFTER YESTERDAY’S TYPICALLY DYSFUNCTIONAL DAY in Congress, the likelihood of a government shutdown in two weeks has increased to at least 60 percent. Virtually all legislation — including a popular defense spending bill — has ground to a halt.WHO CARES? The markets have yawned at government shutdowns in recent years; shutdowns have closed national parks and museums, but the big stuff — Social Security spending, Medicare coverage, etc. — won’t miss a beat. “Shutdown lite” could begin when the fiscal year ends on Sept. 30.

THE ACRIMONY AMONG REPUBLICANS IN THE HOUSE over the budget reached a boiling point yesterday, as House Speaker Kevin McCarthy lashed out, in a profane rant, at hard-line conservatives who seem eager for a shutdown. Do you think the United Auto Workers are itching for a fight? Try talking to the Freedom Caucus hard-liners in the House; who really want a fight.

EVEN THE HARD-RIGHT Rep. Marjorie Taylor Greene said this week that she can’t agree with the “burn it all down” caucus in the House, which wants a shutdown — and the ouster of McCarthy as speaker. The hard-liners are aghast to see the federal budget deficit approaching $2 trillion this year, and they’re determined to take action..

THE BELEAGUERED McCARTHY gave up on passing a defense spending bill yesterday; normally, this is the most popular measure in Congress, loaded with pork for home districts. But even this bill can’t pass.

McCARTHY’S GOAL is to win passage of a continuing resolution by Sept. 30 which would kick the can down the road until the ultimate battle — getting a final deal done by late December. The immediate challenge for McCarthy is to get something done in the next week, but the far right wants fresh spending cuts, border reform and other measures that would have no chance of passage in the Senate, which has its own divisions.

SO AN IMPASSE LOOMS: A deal by Sept. 30 looks increasingly unlikely, which the media will portray as a great crisis. But there are more important issues in Washington — the Fed’s upcoming meeting, Joe Biden’s astonishing free-fall in the polls, and the divisive issue of more aid to Ukraine.

IT’S TOO SOON TO PANIC OVER THE AUTO STRIKE, because the companies have built up inventories and the union has a decent strike relief fund, and it’s too early to panic over a government shutdown. But if there’s no sign of a resolution on either of these impasses, the markets could get jittery — especially as credit rating agencies like Fitch frown on the U.S. dysfunction.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.

AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.

Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

For further information, please visit AGF.com.

©2025 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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