Government shutdown continues with little progress as market plunges amid president’s attacks on the Federal Reserve.

President Donald Trump and top Democrats in Congress sparred over the partial shutdown of the United States government on Monday, with no sign of tangible efforts to reopen agencies closed by an impasse over his demand for funds for a border wall.

Senate Democratic leader Chuck Schumer and his counterpart in the House of Representatives, Nancy Pelosi, accused Trump of being under the sway of conservative House Republicans and blasted the White House for saying “different things about what the president would accept or not accept”.

“It’s Christmas Eve and President Trump is plunging the country into chaos,” Schumer and Pelosi said in a joint statement as the shutdown dragged through its third day.

“Meanwhile, different people from the same White House are saying different things about what the president would accept or not accept to end his Trump Shutdown, making it impossible to know where they stand at any given moment,” they said.

Trump, who on Friday cancelled plans to go to his Florida resort for Christmas because of the shutdown, was scheduled to discuss border security with the US homeland security officials on Monday afternoon.

Earlier, he said on Twitter that he was “all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed Border Security”.

Each side has blamed the other for the shutdown, with no sign of renewed negotiations between politicians on Capitol Hill or with the White House.

181222204250805

On Sunday, a top Trump aide said the shutdown could continue to January 3, when the new Congress convenes, with Democrats taking majority control in the House.

Funding for about one-quarter of federal government programmes – including the departments of Homeland Security, Justice and Agriculture – expired at midnight on Friday.

Without a deal to break the impasse over Trump’s demand for $5bn for a wall along the US border with Mexico, the shutdown is likely to stretch into the new year.

Building the wall was one of Trump’s most frequently repeated campaign promises, but Democrats are vehemently opposed to it.

Trump attacks Fed, market tanks

Meanwhile, Trump’s attacks on the Federal Reserve spooked the stock market, and efforts by his Treasury secretary to calm investors’ fears only seemed to make matters worse, contributing to another day of heavy losses on Wall Street.

181222024221353

The major stock indexes fell more than two percent Monday, nudging the market closer to its worst year since 2008. Stocks are also on track for their worst December since 1931.

The market has been roiled for most of the month over concerns about a slowing global economy, the escalating trade dispute with China and another interest rate increase by the Federal Reserve.

The past two trading days, however, have been dominated by something else: major losses following tweets from the president criticising Fed Chairman Jerome Powell and the central bank.

Trump’s Monday morning tweet heightened fears about the economy being destabilised by a president who wants control over the Fed.

“The only problem our economy has is the Fed,” the president tweeted.

The Federal Reserve is meant to be independent of the White House but Trump has trampled those barriers in his frustration at what he sees as the bank’s harmful interest rate policies.

He has previously called the Fed, which angered him by hiking rates last week, “crazy” and a greater economic threat to the United States than China.

181219170524733

The administration’s attempts to calm those fears may also be backfiring.

Treasury Secretary Steven Mnuchin called the CEOs of the country’s six largest banks on Sunday to seek reassurance that their liquidity levels are healthy.

However, worries about a dangerous run on the banks – like in the financial collapse and subsequent deep recession of 2008 – have not been widely raised previously. So the unusual move by the government left the bankers worried and puzzled, according to US media.

“It just raises more alarm bells for people ‘that maybe there is something bigger going on’ if it’s necessary to have phone calls with the six biggest bank CEOs,” said Manulife AM senior portfolio manager Nate Thooft.

According to Mnuchin’s office, the CEOs confirmed that “they have ample liquidity available for lending to consumer, business markets, and all other market operations”.

“We continue to see strong economic growth in the US economy with robust activity from consumers and business,” Mnuchin said in the statement.