Shutdown on the Horizon

Market Overview
Read time 0.9 minutes

Year To Date Performances:

1. Brace for impact: The FED's roller coaster of rate hikes might have one more twist this year. Despite pumping the brakes, 12 of 19 officials are signalling the potential for an additional increase. Powell's candid stance on inflation highlights the FED's readiness to intervene, and his frank "No" in response to the likelihood of a "soft landing" underscores external challenges. From the escalating oil prices and the UAW strike to looming student loan repayments and a potential government shutdown, the economic landscape is fraught. With such headwinds, Goldman Sachs warns of a dip in growth to 1.3% from the previous 3.1%. As we look ahead, projections set the federal funds rate at 5.1% in 2024, with a gradual descent expected in the following years

2. Tick-tock: The government's clock is nearing midnight as a shutdown looms large. Amidst internal party rifts, Republican leaders had to pull back from a pivotal vote on a crucial funding bill. As Speaker Kevin McCarthy races to secure backing for a new spending proposal before the October 1 deadline, the repercussions of a potential shutdown are stark. Non-essential government operations would come to a standstill, even though vital services like military operations and air traffic control would continue. Meanwhile, consistent operations can be expected from the Postal Service, Social Security, and Medicare. Yet, people could face delays in passport issuances, closures of national parks, and reduced financial oversight. And while non-essential workers might be temporarily out of work, a 2019 legislation promises that they won't be out of pay for long, guaranteeing back pay once the government restarts.

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4. Headlines

   1. SpaceX is suing the DOJ in an attempt to end their discrimination lawsuit.

   2. Jobless claims are at their lowest level since January 2023.

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