Bloomberg Businessweek Government Shutdown Clouds Fed Outlook
Oct 8, 2025
Kay Herr, U.S. CIO at J.P. Morgan, discusses how the government shutdown impacts job and CPI data, which could cloud the Fed's decision-making. Mandeep Singh, Global Head of Tech Research at Bloomberg Intelligence, explores the massive CapEx required for AI, suggesting that investment flows are likely to meet the ongoing demand. Meanwhile, Herman Chan shares insights on regional bank M&A trends and how strategic acquisitions could help stabilize troubled banks, revealing the evolving landscape of the financial sector.
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Fed Minutes Didn’t Shift Market Views
- The September Fed minutes offered little new information and markets barely reacted.
- Kay Herr says only one dissent existed and the debate didn't change the outlook materially.
Use Earnings And Beige Book As Data Proxies
- Monitor corporate earnings starting October 14th and the Beige Book on October 15th for macro clues during the shutdown.
- Kay Herr advises using earnings and the Beige Book as substitutes for missing government data.
Bank Earnings Will Signal Consumer Stress
- Banks' earnings will reveal credit quality and consumer health as employment softens.
- Kay Herr says bank reserves and lending metrics will indicate whether consumer stress is spreading.