Hello,
On Wednesday, the US government shutdown officially reached its 36th day, making it the longest in US history, surpassing the previous record set in December 2018. That shutdown was estimated to have cost the US economy $3 billion in GDP. The estimates this time round are ranging anywhere from losses of $7 billion to $14 billion. The Federal Aviation Administration announced last week they would be reducing air traffic by 10% across 40 major airports – including those in New York, LA, and Chicago. Air traffic controllers, like many other federal employees, have been working without pay since October 1st.
The true economic impact of the shutdown has been difficult to gauge, primarily because many economic releases have been prevented by the shutdown itself. This has left economists, and more importantly the Fed, largely blind to the current economic state. In theme with the latter half of 2025, equity markets have been seemingly unfazed by the commotion in the capital. However, the longer it goes on, the more attention it’s likely to garner. However, there was positive news over the weekend in relation to a potential compromise. Whether such a deal manages to successfully navigate both Houses of Congress and the Oval Office remains to be seen, but for now, markets are taking the latest developments as a positive step.
As always, if you wish to discuss anything in this newsletter in further detail, please do get in touch.
