Goldman Sachs has lowered its probability of a U.S recession in the next 12 months to 15% due to positive inflation and labor market data, while also predicting a reacceleration in real disposable income and expecting the Federal Reserve to keep interest rates unchanged.
There is a significant chance of a government shutdown as lawmakers on Capitol Hill are divided on reaching a resolution, with Senator Ted Cruz suggesting that President Biden and Senator Schumer may want a shutdown for political gain.
A potential government shutdown could have limited impact on the stock market, but could reduce economic growth by 0.15 percentage points per week and potentially cut 1.2 percentage points from fourth-quarter growth; however, the market tends to be unaffected by shutdowns and is more influenced by corporate developments and macroeconomic factors.
Former House Majority Leader Eric Cantor advises Republican colleagues not to pursue a government shutdown unless they have a clear plan to come out as winners, citing the failed attempt to block Obamacare in 2013 as a major political headache that did little to hinder its rollout.
There is a possibility of a government shutdown as Congress faces a deadline to pass 12 spending bills, with the most likely scenario being a continuing resolution to extend last year's spending levels for a designated period of time.
The potential government shutdown threatens to deprive the Federal Reserve of crucial data on the labor market and inflation, which could hinder its ability to make informed decisions about the economy and interest rates.
Lawmakers in Congress are facing a potential government shutdown at the end of the month, with the possibility of a shutdown becoming increasingly inevitable due to the lack of progress in negotiations and disputes between House Speaker Kevin McCarthy, hardliners in his party, and the US Senate.
Goldman Sachs warns that three factors - the resumption of student loan payments, the autoworkers' strike, and a potential government shutdown - could lead to a significant slowdown in US GDP growth during the fourth quarter of 2023.
Lawmakers in Congress have less than two weeks to reach a deal on funding the government past September 30, and there is a risk of a partial government shutdown if an agreement is not reached. Some GOP groups are discussing a 30-day stopgap spending patch with border security measures attached, but a shutdown is expected to be short-term.
Lawmakers are dealing with a potential government shutdown as oil prices rise above $90 per barrel and housing data is expected, all ahead of the September FOMC meeting where the trends in inflation and the housing market will influence the Fed's decision on interest rates.
Senate Minority Leader Mitch McConnell warns House Republicans that a government shutdown would be detrimental to the Republican Party both politically and in terms of policy change.
The White House warns that a government shutdown at the end of the month could have damaging consequences for the economy, national security, and the American public.
US stock futures rise as investors await Fed decision on rates; US debt rises to $33 trillion as government shutdown looms; Federal Reserve expected to pause rate hikes; Impact of government shutdown, autoworkers strike, and rising oil prices on the economy; Biden reshapes the Federal Reserve.
A full government shutdown in the US is likely at the end of the month, which could impact the Federal Reserve's decision to raise interest rates in November, according to analysts at PIMCO.
Wall Street feels defensive as the US national debt surpasses $33 trillion and a government shutdown looms, potentially worsening the economy's current issues and increasing the likelihood of a recession, with the shutdown estimated to cost the US economy $6 billion per week and shave GDP growth by 0.1 percentage points in the fourth quarter of 2023.
With just over a week until Congress hits their deadline, the possibility of a government shutdown grows as House Republicans remain divided on spending negotiations.
The Federal Reserve has paused raising interest rates and projects that the US will not experience a recession until at least 2027, citing improvement in the economy and a "very smooth landing," though there are still potential risks such as surging oil prices, an auto worker strike, and the threat of a government shutdown.
Investors shouldn't worry about a government shutdown as it is unlikely to have a significant impact on the markets.