Investing.com -- U.S. lawmakers are racing to find a resolution to an ongoing budget stand-off ahead of October 1, when the federal government is set to run out of funding for its operations.
Over the weekend, Democrats and Republicans in Congress both warned that there is a chance a deal will not be reached. However, House Speaker Kevin McCarthy, a leading GOP figure, has remained hopeful that a shutdown can be avoided.
McCarthy has faced internal opposition from conservative holdouts over taxing and spending, including on support for Ukraine. A plan to create a 45-day extension to government funding to give legislators more time to hash out an agreement has also come up against strong resistance.
Washington's latest budgetary showdown comes only a few months after a battle over the U.S. debt limit almost brought the world's largest economy to the brink of a damaging default. Hardline Republicans and allies to former president Donald Trump have voiced their disapproval of the outcome of the debt-ceiling fight, suggesting that they are even less likely to back a new fiscal agreement.
Stock market futures edged lower on Monday, with investors eyeing the budget talks and gauging the implications of a hawkish Federal Reserve policy update last week.
"In recent episodes, the shutdowns were one of several factors contributing to equity market turbulence and we think it’s fair to assume the same was probably true in the past as well," analysts at RBC (TSX:RY) Capital Markets said in a note to clients. "Fraught politics tend to be a symptom of challenging times generally."