Prof G Markets The Economic Fallout of a Government Shutdown & Why Fermi Will Be the Worst IPO of 2025
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Oct 1, 2025 In this discussion, Stephanie Roth, Chief Economist at Wolfe Research, highlights the economic implications of a possible U.S. government shutdown. She estimates a 0.4% GDP hit from the last shutdown and anticipates a similar duration this time. The conversation also touches on potential mass layoffs, which could drastically impact the labor market. Shifting gears, they delve into Fermi America, a company facing scrutiny as it prepares for what might be the worst IPO of 2025, raising questions about its revenue claims and viability.
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Shutdowns Cause Real Daily Output Loss
- A shutdown delays government pay and causes unrecoverable lost output like closed national parks and lost revenue.
- Stephanie Roth estimates losses similar to the 2018 shutdown, roughly tens of millions per day adjusted for inflation.
Shutdowns Can Dent Quarterly GDP
- The 2018 35-day shutdown trimmed GDP noticeably, about a 0.4 percentage-point hit to quarterly GDP.
- Roth frames that as reducing a 2% trend quarter to roughly 1.6% during the shutdown.
This Shutdown May Mirror 2013
- This shutdown likely resembles 2013 more than 2018 because it's a full shutdown and hinges on a narrow political concession.
- Wolfe Research expects about a two-week duration if parties commit to negotiating ACA subsidies.