Core Points - The U.S. federal government has shut down for the first time in nearly seven years, affecting approximately 750,000 federal employees who will be forced to take unpaid leave [1][5] - The shutdown is expected to delay the release of significant economic data, including the September non-farm payroll report and the Consumer Price Index (CPI), complicating decision-making for the Federal Reserve [1][11][13] - The economic impact of the shutdown is projected to be around $7 billion in GDP loss per week, with potential long-term effects on investor and consumer confidence [1][16] Federal Employee Impact - Approximately 750,000 federal employees will be on unpaid leave, costing about $400 million in daily wages [1] - Essential services will continue to operate, but non-essential government projects, such as national parks, may face closures [1][5] - The financial strain on federal employees could lead to severe economic difficulties, as seen during the previous shutdown from 2018 to 2019 [5][11] Political Dynamics - The shutdown reflects ongoing political battles between the two parties, primarily centered around healthcare funding and the Affordable Care Act [9][10] - Both parties are using the shutdown as leverage to force concessions from each other, with Democrats seeking to restore nearly $1 trillion in Medicaid funding [9][10] - The political landscape has shifted, with both parties believing that a shutdown may be more beneficial to their interests compared to previous instances [9][10] Economic Data Release - The Labor Department has indicated that all operations will pause during the shutdown, leading to the postponement of various economic reports [11][12] - Key reports, including the September non-farm payroll and CPI, are scheduled for release but may be delayed due to the shutdown [12][13] Market Reactions - Historical data suggests that the stock market may experience short-term pressure during the shutdown, but typically rebounds in the months following the reopening [18] - U.S. Treasury yields are expected to rise during the shutdown, as investor concerns about fiscal stability increase [20] - Gold prices tend to increase with the duration of the shutdown, reflecting heightened uncertainty in the market [23]