Inflation Projections - The Reserve Bank of India (RBI) has revised downwards its FY26 Consumer Price Index (CPI) inflation projection by 50 basis points to 2.6%, which is a significant 160 basis point cut from earlier projections made in April [2][3] - The report suggests that actual inflation for both FY26 and FY27 could be much lower than the RBI's revised estimates due to favorable domestic conditions [2][3] Economic Growth Estimates - The RBI has also increased its estimate for real GDP growth for FY26 to 6.8% [3] - For FY27, the inflation projection is set at 4.5% [3] Monetary Policy Insights - The Monetary Policy Committee (MPC) has decided to maintain the policy rate unchanged, which is seen as a logical move given the current global economic uncertainties [4] - The report emphasizes the importance of monetary policy communication in shaping expectations and maintaining clarity in forward guidance [4] Future Rate Cuts - The report indicates that the RBI may be open to future rate cuts due to low inflation forecasts and recent downward adjustments in growth estimates, although the timing of such cuts remains uncertain [5] Domestic Financial System - The MPC's decision reflects a dynamic approach that goes beyond traditional monetary policy, supported by comfortable liquidity conditions and a stable external sector despite trade uncertainties [6] - The domestic financial system is expected to benefit from forward-looking reforms aimed at enhancing India's global positioning and reinforcing its resilient economic ecosystem [6]

How worried should we be about a potential government shutdown once we blow through the deadline tomorrow at midnight. Democrats in the Senate, they're filibustering the Republican bud budget bill. They want to extend the health insurance subsidies and the Affordable Care Act, reverse some of the president's recent Medicaid cuts.So far, it sounds like that both sides are pretty intransigent. And if you look at the predictions market, they're currently assigning a roughly 75% odds of a shutdown by Wednesday. ...

How worried should we be about a potential government shutdown once we blow through the deadline tomorrow at midnight. Democrats in the Senate, they're filibustering the Republican bud budget bill. They want to extend the health insurance subsidies and the Affordable Care Act, reverse some of the president's recent Medicaid cuts.So far, it sounds like that both sides are pretty intransigent. And if you look at the predictions market, they're currently assigning a roughly 75% odds of a shutdown by Wednesday. ...

Economic Impact of Government Shutdown - A government shutdown typically reduces GDP growth by approximately 0.25 percentage points per week, potentially leading to a full percentage point reduction in fourth quarter growth if the shutdown lasts four weeks [4] - A three-week shutdown, while significant, may not have a lasting impact on the overall economic performance of the fourth quarter, as there may be opportunities to recover losses once operations resume [5][6] Data Collection and Labor Market Insights - The U.S. Bureau of Labor Statistics (BLS) will suspend all operations and data collection during a government shutdown, which will limit the availability of key economic data [1][10] - In the absence of federal data, alternative datasets, such as ADP data, will become increasingly important for understanding labor market conditions [2][3] - A potential reduction in the number of employees at the Department of Labor during a shutdown could lead to significant disruptions in data collection, particularly affecting labor surveys for October [11][13] Federal Reserve and Economic Decision-Making - The Federal Reserve may face challenges in making informed decisions due to the lack of official statistics during a government shutdown, which complicates their communication and policy formulation [7][8] - The absence of preferred inflation measures and unemployment statistics could hinder the Fed's ability to assess the balance of labor supply and demand [8]

Government Shutdown Risk - A US government shutdown is looming within 36 hours, with congressional leaders meeting with the President to seek a resolution [2] - The mood in Washington DC suggests a shutdown is likely, although the meeting could be a turning point [3] - Disagreements between Republicans and Democrats over healthcare provisions, specifically Affordable Care Act premium tax credits impacting 20 million Americans, are a key sticking point [4] Economic Impact - A government shutdown would halt the release of economic reports, including the widely watched jobs number [5] - Longer shutdowns extending into October would hinder data collection for key economic indicators like PPI, CPI, and jobs data, potentially impacting data accuracy [7][8] - Moody's predicts each week of a shutdown would shave 0.1% off quarterly GDP growth [9] Impact on Federal Workers - Millions of federal government workers and contractors face potential pay delays or non-payment during a shutdown [9] - While federal workers typically receive back pay, federal contractors may not, impacting businesses [10] - Mass layoffs of federal employees could begin if a government shutdown starts on Tuesday at midnight [10]

Economic Growth and Labor Market - The economy experienced a surprising GDP growth of nearly 4% in the second quarter, marking President Trump's first full quarter in office [2][4] - Revisions indicate that the previous administration's economy was weaker than initially reported, with approximately 1.5 million in downward revisions [3] - Despite a weak labor market, the outlook for GDP growth remains strong, with estimates suggesting growth near 3.9% in the third quarter [4][8] Investment and Spending - A significant surge in capital expenditures (capex) and investment spending is attributed to a major bill passed by President Trump [3] - The expectation is for broad-based job growth across various sectors, including financial services, manufacturing, and construction, as the economy generates fast growth [11] Monetary Policy and Interest Rates - The Federal Reserve's current interest rates are seen as a potential headwind to economic growth, with calls for further rate cuts to support the economy [12][14] - There is a consensus that inflation is not a current concern, with energy and food prices moderating, and no significant inflationary pressures observed [17][19][23] - The Fed is expected to continue cutting rates, as historically, initial cuts lead to more reductions [23] Future Economic Projections - A sustainable growth rate of around 3% is considered achievable, which would help stabilize the economy and improve fiscal footing [10] - The job market is anticipated to re-accelerate, with jobless claims decreasing and hiring broadening across multiple industries [11]

Economic Data Summary - Q2 GDP was revised up from +3.3% to +3.8%, marking the strongest quarter of growth since Q3 2023 [2] - Consumption saw a significant increase from +1.6% to +2.5%, indicating a stronger appetite among U.S. consumers [3] - The Price Index increased by 10 basis points, with headline at +2.1% and core at +2.6% [3] Job Market Insights - Initial Jobless Claims fell to 218K, down 17K from estimates and 14K from the previous week, reaching the lowest level since mid-summer [4] - Continuing Claims rose slightly to 1.926 million, remaining below 1.94 million for the third consecutive week [5] Durable Goods Orders - August Durable Goods Orders increased by +2.9%, significantly better than the prior month's -2.7% and the consensus estimate of -0.5% [6] - Excluding Transportation orders, the increase was +0.4%, down from +1.0% in the previous month [6] Trade and Inventory Data - The Advanced U.S. Trade Balance for August improved to -$85.5 billion from -$102.8 billion [7] - Advanced Retail Inventories remained unchanged at +0.2%, while Advanced Wholesale Inventories decreased to -0.2% [7] Company Performance Expectations - Costco is expected to report fiscal Q4 results with a projected earnings growth of +12.8% year over year and revenue growth of +8.1% [10] - Costco has outperformed earnings expectations in three of its past four quarters [10]

Core Insights - The U.S. economy experienced a significant upward revision in GDP growth for the second quarter, now reported at an annual rate of 3.8%, compared to earlier estimates of 3.3% and 3% [1][2] - This growth was primarily driven by a notable acceleration in consumer spending, with real final sales to domestic purchasers increasing by 2.9%, surpassing previous estimates of 1.9% [2] - The revised data indicates a strong rebound from a decline of 0.5% in the first quarter, marking the weakest economic growth period since 2022 [3] Economic Indicators - Jobless claims decreased to 218,000 from 232,000, which is significantly lower than the Dow Jones consensus of 235,000 [4] - The Federal Reserve of Atlanta projects a real GDP growth rate of 3.3% for the third quarter, slightly downgraded from an earlier estimate of 3.4% due to decreased residential investment growth [6] Analyst Reactions - Analysts noted the nearly 1% increase in GDP growth as "notable and outside the norm," especially in a year characterized by volatility and mixed economic signals [5] - Positive sentiment was expressed regarding the economy's performance, with stronger-than-expected jobless claims and retail sales [5] Consumer Sentiment and Inflation - Recent consumer sentiment has shown increased pessimism, with a decline reported in September, amid rising inflation and a weakening job market [8] - The upcoming release of personal consumption expenditures (PCE) price index data is anticipated, with expectations of annual inflation reaching 3% in August [7]

Economic Growth - The US economy is experiencing its fastest growth in nearly two years, with GDP increasing by 3.8%, revised up from 3.3%, driven by consumer spending and business investment [6][4] - Jobless claims have fallen to 218,000, indicating a stable labor market despite concerns about hiring and firing trends [4][6] Consumer and Business Spending - Consumer spending has significantly contributed to GDP growth, although there is a noted decline in used car purchases [1][6] - Business spending has also increased, particularly in durable goods, which rose by 2.9%, although computer and chip orders saw a decline [4][6] Federal Reserve Policy - Fed Governor Stephen Myron suggests that the current economic conditions do not warrant extreme pessimism, but acknowledges that the neutral rate is drifting down, necessitating policy adjustments [2][6] - Some Fed members, including Jeff Schmitt, view the current policy stance as only slightly restrictive and do not advocate for immediate rate cuts, indicating a cautious approach to monetary policy [7][6]

Core Insights - Brazil's central bank projects inflation to remain near the official target but will not meet it, forecasting 3.1% for Q1 2028, down from 3.4% for Q1 2027 [1][2] - The central bank maintains a target inflation rate of 3% with a tolerance band of 1.5 percentage points [2] - Interest rates are held at 15%, indicating a prolonged pause in monetary policy to control consumer prices [2] Inflation Forecasts - The central bank has lowered its 2025 inflation forecast to 4.8% from 4.9% and kept the 2026 projection at 3.6% [3] - Factors contributing to inflation include a dynamic labor market and increased residential electricity costs, while the appreciation of the real and reduced inflation expectations are seen as downward pressures [3] GDP Growth Projections - The GDP growth forecast for 2025 has been reduced to 2.0% from 2.1%, reflecting expected moderation due to recent monetary policy tightening [3] - For the first time, the central bank has projected GDP expansion for 2026 at 1.5% [4]