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Daily update

  • The US government shutdown has been delayed—but in the meantime, journalists and (more importantly) economists have had to waste time analyzing this nonsense. The uncertainty the fiscal farce periodically creates also carries an economic cost.
  • One consequence of the delayed shutdown may be a challenge to House Speaker McCarthy. Investors do not care too much about McCarthy’s fate—the speaker probably gets the same attention as a minor regional Federal Reserve president. But if McCarthy were replaced by someone closer to the far-right, this would reduce any lingering hopes of bipartisanship.
  • China’s Golden Week holiday is ongoing as the World Bank offers a dour outlook for the Asian economy (with changing global demand patterns and structural change). Be careful what data is used to analyze the economy—in the past, China’s consumers have been eager to take trips, but tended to spend less per person when travelling. It is the latter data that matters most.
  • Fed Chair Powell is speaking on a round table, and is unlikely to offer any policy insight. Fed President Williams, who is worth listening to, is speaking on climate change. There are some assorted business sentiment polls crying for attention, but like most attention seekers these are best ignored.

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