Exchanges The Shutdown’s Economic Impact
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Oct 8, 2025 Alec Phillips, Chief US political economist at Goldman Sachs Research, dives into the implications of the U.S. government shutdown on the economy. He discusses how this shutdown differs from past ones, particularly due to the current political climate. Alec analyzes who bears the brunt of the blame, potential duration based on key financial triggers, and quantifies the economic costs, including impacts on GDP. He also addresses market reactions and the Fed's likely responses amidst data gaps, providing insights on the risks of frequent shutdowns.
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This Shutdown Feels Unusually Broad
- This shutdown is broader and may last longer than many past ones, affecting the Pentagon and all domestic agencies.
- That breadth makes it potentially one of the biggest shutdowns in recent U.S. history.
Blame Shifts With Messaging And Polls
- Historically the initiating party is often blamed, but public opinion can shift depending on messaging and who controls the narrative.
- Current polls show more voters blaming Republicans, though many voters simply blame 'everybody.'
Monitor The Military Payday Deadline
- Watch the October 15 military payday as a likely catalyst for reopening the government.
- Expect narrow fixes (e.g., paying the military) to delay a full resolution and prolong uncertainty.