Uncharted territory: Unpacking the longest government shutdown on record

Nov 7, 2025

In a riveting discussion, Michael Feroli, Chief U.S. economist at J.P. Morgan, and Jay Barry, Head of Global Rates Strategy, dissect the implications of the longest government shutdown in U.S. history. Feroli highlights that the shutdown could deduct around 0.25 percentage points from GDP weekly, leading to weaker consumer sentiment. Meanwhile, Barry delves into Treasury market reactions and potential shifts in Fed expectations. They also explore which sectors are most vulnerable and the broader economic uncertainties caused by missing government data.

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INSIGHT

Shutdown's Direct Hit On Growth

The CBO estimates the shutdown removes about 0.25 percentage points of GDP growth per week in Q4.
Michael Feroli warns the effect may grow beyond linear losses and produce lasting activity shortfalls.

INSIGHT

Sentiment Diverges: Businesses vs Consumers

Business sentiment looks only modestly affected while consumer sentiment shows weakness that may reflect the shutdown.
Feroli says labor market weakness so far hasn't broken significantly downward despite higher uncertainty.

INSIGHT

Data Gaps Raise Policy Uncertainty

Missing federal data raises forecasting uncertainty and complicates policymaking.
Feroli notes some Fed officials favor caution without data, while others see the shutdown as a downside risk prompting cuts.

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As the U.S. government shutdown drags on, uncertainty continues to build for both investors and everyday Americans. In this episode of J.P. Morgan's Making Sense, Samantha Azzarello, head of Content Strategy, sits down with chief U.S. economist Michael Feroli and Jay Barry, head of Global Rates Strategy, to explore the impacts of the prolonged shutdown. How is it weighing on consumer sentiment and economic growth, and how are markets responding? Plus, have expectations for Fed policy changed as a result?

This episode was recorded on November 7, 2025.

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