The new speaker of the U.S. House of Representatives could impact global financial markets as the possibility of a U.S. government shutdown increases.

No. 2 House Democrat Katherine Clark said Sunday that the House will vote for a new speaker on Tuesday at around 12 noon ET — two weeks after eight Republican members joined the Democratic minority in ousting the chamber’s previous leader, Kevin McCarthy.

Over the weekend Jim Jordan, an ally of Donald Trump, said he believes he will get the 217 votes required to secure the speakership.

However, on a first ballot Tuesday, Republicans rejected Jordan for House speaker, as an unexpectedly numerous 20 holdouts denied the hard-charging ally of Donald Trump the GOP majority needed to seize the gavel.

The speaker of the United States House of Representatives holds a pivotal role in shaping economic policies and priorities. Their influence over the legislative agenda, budget, taxation, trade policies, and other economic matters makes their position essential in determining the economic direction of the world’s largest economy.

We expect the next U.S. speaker will be less inclined to make deals than Kevin McCarthy; in many ways it makes more sense for them, politically, not to be a deal-maker in the current environment.

As such, we believe that the next U.S. speaker of the House is more likely to effect a partial government shutdown in mid-November in order to try and seize a political advantage. It is also more likely that under this scenario, a shutdown would be extended — unlike the previous, more symbolic, ones.

This would send shockwaves around global financial markets.

A government shutdown creates uncertainty about the world’s largest economy, budgetary decisions, and the potential for disruptions in federal services. This uncertainty can be expected to lead to increased market volatility as investors become more risk-averse.

It erodes investor confidence, both domestically and internationally, meaning investors pull back from the U.S. financial markets, leading to a decrease in asset prices and potential capital flight.

We expect that should a shutdown happen, it will prompt Moody’s to cut the U.S. credit rating below AAA.

Over the summer, global rating agency Fitch downgraded the US government’s top credit rating to AA+ from AAA. Fitch cited fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that puts at risk the government’s ability to pay its bills.

This was the second major rating agency (after Standard & Poor’s) to strip the U.S. of its triple-A rating.

A shutdown would also hit the U.S. dollar, says the deVere CEO, impacting exchange rates and affecting international trade and investment. It may also affect the prices of commodities such as oil and agricultural products, which would trigger price fluctuations on global commodity markets.

We believe that a U.S. government shutdown is now more likely with a new speaker of the House, and this has the potential to create a domino effect in global financial markets.

Investors need to closely monitor developments in the U.S. government, as its stability and decisions have a profound influence on the global financial markets.

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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.