Making Sense

Shutdown showdown: Economic and market impacts explained

10 snips
Oct 3, 2025
Experts discuss the U.S. government shutdown and its economic implications. They explore political priorities, ongoing negotiation statuses, and potential lengths of the shutdown. Historical effects on GDP and employment are examined, contrasting routine shutdowns with the risks of a debt crisis. Market reactions are assessed, with a focus on treasury issuance and the importance of payroll data. The conversation highlights broader sentiment risks and potential layoffs influenced by political negotiations.
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INSIGHT

Core Positions Driving The Impasse

  • Democrats seek health-care concessions tied to a continuing resolution, including ACA premium tax credits and reversing Medicaid cuts.
  • Republicans want a short seven-week CR to give Appropriations time to finish full-year bills, creating a standoff over scope and duration.
INSIGHT

No Active Talks, Two Duration Scenarios

  • As of recording, formal negotiations had stalled with only occasional bipartisan conversations after failed Senate votes.
  • The shutdown could be short like past episodes or protracted if rhetoric and administration actions further poison talks.
INSIGHT

Who Gets Furloughed And Why It Varies

  • About 27% of the budget is discretionary and subject to furlough decisions by the White House.
  • Roughly 750,000 federal employees were furloughed, with agency rates varying widely from 89% at EPA to 2% at Treasury.
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