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President Donald Trump is scheduled to meet with congressional leaders on Monday to negotiate solutions to avoid a government shutdown, which is set to occur on Tuesday at midnight if an agreement is not reached.
A government shutdown occurs when Congress fails to pass necessary appropriations or temporary resolutions to fund the federal government. This can lead to non-essential government employees being placed on unpaid leave while essential workers must continue to work without pay until a resolution is achieved. Historically, there have been four major government shutdowns in the last 20 years, with the longest lasting 35 days in 2018 over a border dispute.
Recent comments from Senate Minority Leader Chuck Schumer and President Trump suggest a shutdown is likely, with 59% of bettors on Polymarket predicting it to happen by October 1st. Bank of America data indicates that the S&P 500 has gained about 1% on average during previous shutdowns, suggesting minimal impact on equity markets.
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