Know Your Risk Podcast The Neutral Rate is HIGH
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Sep 29, 2025 Chase explores the implications of a high neutral rate and its impact on the economy. He discusses the risks of a government shutdown and potential effects on jobs data. The conversation highlights strong consumer spending and GDP momentum, while also examining the slowing labor market trends. Immigration's crucial role in GDP growth comes under scrutiny, linking its contribution to overall economic health. New tariffs on various industries are discussed, analyzing how they could affect costs and demand across the board.
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Market Mixed Despite Modest Gains
- The market shows mixed signals: indexes slightly up but weekly performance softening since July.
- Small caps and equal weight indexes outperformed, while the dollar eased and commodities had mixed moves.
Shutdown Risk Makes ADP Crucial
- A government shutdown looks likely but negotiable, and it may be short-lived if small concessions are made.
- A shutdown would disrupt next week's BLS jobs release, making ADP data far more important.
Prepare For Soft Payrolls
- Expect the jobs report to show weaker payroll gains with a 70,000 consensus and stable 4.3% unemployment.
- Watch manufacturing jobs where declines are expected and may signal ongoing labor-market erosion.