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US shutdown could slash Q4 GDP by whopping 2%
07-11-2025 13:43
US shutdown could slash Q4 GDP by whopping 2%
US shutdown could slash Q4 GDP by whopping 2%

It began like a plotline from a gripping thriller about bankruptcy: the US government decided to embark on the longest pause in its history. Apparently, it forgot how to turn itself back on. Bloomberg has estimated that this break is costing the US economy between $10 and $30 billion each week.

Officially, this is called a government shutdown. Unofficially, it is when the president and Congress are playing poker with taxpayers' money, while decent Americans sit at home wondering whether they will receive social benefits and salaries by Christmas.

The authorities claim that this situation is temporary. In reality, history reminds us that a shutdown has occurred in the US for the seventh year straight, and each time the damage becomes more pronounced. Jonathan Millar at Barclays remarked that previous shutdowns did not lead to catastrophe. Now, the economy is not just fragile; it is trembling with fear of inflation and unemployment. It is like a building that has endured two earthquakes and now awaits a third.

For the average American, this situation is reminiscent of a family budget where husband and wife have failed to agree on expenses and punish each other by cutting off the electricity. Federal employees are losing their salaries. Travellers cannot visit parks because they are closed. Air traffic controllers are absent, causing planes to sit idle like cars in a traffic jam. Companies reliant on government contracts are praying for a miracle.

The statistics are staggering: the Congressional Budget Office predicts that the shutdown could trim growth in the fourth quarter by a full two percentage points. Two percent represents millions of people who will not be paid their salaries they counted on. The most astonishing thing is that the Senate has failed fourteen times to even pass a temporary resolution aimed at breaking the deadlock. Incredible!

The conclusion is simple: the American government is demonstrating to the world that when the state machinery no longer operates properly, the economy will be disabled slowly but surely. No one can stop the process because policymakers are focused on playing political theater. This shutdown is an odious historic achievement, but history is created by those who foot the bills.

 

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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