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Pethokoukis: These shutdowns are political events, not economic ones
CNBC Television· 2025-10-06 11:41
Government Shutdowns & Market Impact - The market's lack of reaction to government shutdowns incentivizes politicians to continue this practice, as they perceive it as base signaling [5][6] - While shutdowns may not have immediate economic effects, a central bank making incorrect decisions due to missing data could have longer-term consequences [9] - Betting markets indicate the shutdown will likely end in a couple of weeks [2] Federal Reserve & Data Dependency - The Federal Reserve risks making policy decisions without complete information due to potential data delays from the shutdown, including jobs reports, CPI, and PPI [7][9] - There is concern that the Fed might rely on private jobs data and Google searches if official data is unavailable [9] Housing Market & Government Intervention - The president's urging of home builders to increase construction is viewed with concern, particularly regarding potential inflationary effects from mismatched supply and demand [10][12][13] - Artificially juicing demand for housing, especially with long-term supply issues related to local zoning regulations, could lead to problems reminiscent of 2008 [12][13] - The president should focus on encouraging states and local governments to ease zoning regulations to increase housing supply [14]