The atmosphere in the United States maintains the excitement of the worldwide markets as important issues are still in the decision making process.

Recently, the president Barak Obama announced the new chairwoman of the Federal Reserve Bank, the current vicepresidente Janet Yellen. As the mandate of the current chairman Ben Bernanke is finishing on 31st of January 2014, Janet Yellen is expected to assume the responsabilities if this job. Since the beginning of 2013 economists predicted the entering in the scene of J. Yellen as she is considered the most appropriate person in this position. She is expected to maintain the current economic view of Ben Bernanke and sustain the monetary stimulus program.

The last FOMC minutes revealed the beginning of new discussions about tapering. The majority of the FOMC members are concerned about the long term consequences of the situmuls program especially in the given context of dissapointing economic data that characterized the economy recently. Fed officials want to see the tapering beginning later this year (the last meeting of this year of the FOMC members, which is due to take place in December, is likely to bring relevent information about this situation). The completition of the program is intended to be accomplished in the mid of 2014. Of course is difficult to relay in any of those assumption as long as the data coming from the real economy are not sustaining a stable recovery.

Economists forecast a $5 billion reduction in Treasury purchases while the buying of Mortgage-backed securities is expected to stay in place as the recovery of the housing sector needs further sustainment. Also, FOMC maintains its statement regarding the benchmark interest rate to be kept near zero as long as long as the unemployment exceeds 6.5% and the outcome for inflation doesn’t go above 2.5%.

In the near term, economists are expecting the final decision of the current debt ceiling debate as the government shutdown is approaching 2 weeks. The last news regarding this matter revealed that both Democratic leaders and House Republicans are open to a short term increase in the debt limit. On the other side, Democrats are insisting on imposing budget conditions while Republicans want to attach conditions to both in the form of spending cuts or entitlement changes.

The number one problem of the last two weeks didn’t get a solution yet so the partial government shutdown stays in place as talks between the White House and House Republicans have entered in deadlock during the weekend. The 17th of October’s deadline is close and the government doesn’t have an agreement. As a matter of fact, the American Government seems to be comfortable with taking decision in the last moment so everybody is expecting the 17th of October in order to see a solution added to this tense situation.

The representatives of IMF and the World Bank, which have been holding a meeting until today, warranted about the necessity of reaching an agreement, as a possible negative scenario would “seriously damage” the global economy.

Today, the discussions started again even if the weekend gave the impression that an agreement is still far from their negotiations. President Barack Obama is discussing with congressional leaders of both parties and are trying to find the middle way of approaching the automatic spending cuts. Republicans are reminding about the sequester, which is due to take effect at the beginning of 2014 and are strongly arguing against it while the Democrats highlight its positive results, as the federal expenses have been decreasing.

The last meeting started to reflect more optimism, as it should in the last moment, and officials are positive about closing an agreement before Thursday. Finding the most appropriate way of keeping borrowing money and avoiding a global shutdown, which will have a cascading effect, requires a couple of days more.

As the effects of the 3rd of August 2011’s last government shutdown threat are still visible, speaking about the Budget Control Act implemented by President Barak Obama which is still activating by the so called sequestration, we see now again the American Government in standstill. To question is the decision that is about to be taken and how officials will present the positive side of the situation in order to give the impression that everything is running smoothly.

As anticipated, the American Government was saved at the eleventh hour. Following an agreement between Republicans and Democrats, the nation’s borrowing limit will be raised until the 7th of February and the Government will reopen until the 15th of January. As the top priority of the Republicans, it has been decided to maintain the sequesters’ constraints.

The American officials promised to come up with a long term debt plan by 15th of December, in order to avoid this kind of situations for the future. Now that the promises have been made, nothing was left but to expect the Senate and the Congress to pass the agreement.

The relief of the markets was expressed by the intraday highs of the American Indices but still the reluctance of investors is visible, as this episode questions the confidence in the Unites States’ Government. The level of uncertainty also touched historical highs and seems to remain on an upward trend. Pessimistic voices already occurred, reinforcing the idea that each such chapter brings the American economy closer to a collapse that at some point in the future will be unavoidable. As the mistrust sprouts in the investors’ portfolios, the triple A rating of America looks now as an unfair vote of confidence. Investors expect now the rating agency to take in consideration the recent events.

A positive signal was send by the Bank of American Corp which posted higher than expected profits in the third quarter. The increased was calculated at 32%, registering a very productive activity and strategic management of its assets during the financial crisis. The Bank’s officials are expecting for the next quarter the mortgage loan production to fall.

The most expected indicator of the American labour market failed to bring the expected numbers. Thus, the Non-Farm Payroll was reported at the value of 148k new jobs created last month. Taking in consideration the last period of time, economists seem to become reluctant when it comes to consider the NFP in the general picture of the economy. At all events, 148 000 new jobs created doesn’t say about the economy that is strengthening but it rather hardly keeping at a pace close to the normal one.

The unemployment rate positively surprised reaching 7.2%, a value last time hit five years ago. Still, the unemployment rate is far from the Federal Reserve’s target of 6.5% required to start increasing the interest rate. All this together with the latest episode consisting of the 2 weeks of government shutdown and the unsolved federal debt are clearly indicating that the American economy is not closing the year on an optimistic tone. Investors are choosing as safe investments the Euro, gold and stocks. Moreover, economists keep postponing the moment of tapering and the 4th quarter report is expected to show a shrink of the economy with 0.25%.