How the government shutdown and furloughs could impact markets and the economy

Market Impact of Government Shutdown - The market has historically performed reasonably well during government shutdowns [2] - Current market strength is attributed to AI excitement, global rallies, and certainty about interest rates [3][4] - Equity investors may not have the longest attention span, focusing on immediate impacts like the potential for an October Fed rate cut [23] - The equity market is currently placid about the government shutdown, caught up in its own preoccupations [25] Economic Data and Analysis - Government shutdown leads to upgrading the priority and significance of available non-government data [6] - There's a risk associated with relying on non-government data, which may not be as reliable as government data [8] - Economists are focusing on broader themes rather than specific monthly numbers due to data uncertainty [15] - The economic data is deferred, not derailed, but the shutdown highlights changes in the economic profession [17] Debt and Deficits - The US has $375 trillion in debt, a $2 trillion budget deficit, and over $1 trillion a year to service the debt [9] - The government shutdown is fundamentally about spending more money than the country has [10] Impact on Employment - A general rule of thumb is a 01 percentage point impact on the economy for each week of the shutdown [19] - If the shutdown extends beyond October 17th, there could be a significant impact on the October unemployment rate, potentially as high as 48% [19] - The US needs to create 40000 jobs to keep the unemployment rate stable [29]