Shutdown & Debt Limit

“Increasing likelihood that efforts to end shutdown will converge with debt limit debate – implies downside risk of 0.25pp to 0.5pp to our GDP forecast of 2.5pp in Q4, with positive effect of same magnitude in Q1 as federal spending returns to its non-shutdown level. We estimate the current shutdown would reduce growth by 0.2pp in Q4 on an annualized basis if it lasted a week, and 0.4pp if it lasted two weeks.” (Goldman Sachs)

GS

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