Losing jobs

Daily update

The US government shutdown continues—Senate Republicans failed to pass their measure to end it. US President Trump indicated some federal government workers may be fired, not furloughed. That would doubtless face legal challenges, but might also increase fear of unemployment. Low fear of unemployment has helped keep US growth mediocre rather than recessionary. However, the federal government workforce is a very small share of US employment, which should limit economic damage.
The US Supreme Court ruled Federal Reserve Governor Cook cannot be fired ahead of January court hearings. This is unlikely to change the near-term policy outlook, as Cook voted with the FOMC majority in favor of a 25bps rate cut at the last meeting, and tends toward the dovish.
EU September inflation was as the market and the ECB had expected. The y/y rate rose slightly, but because of price changes a year ago, not price momentum today. This does not give the ECB any incentive to change its near-term policy stance.
Argentina’s peso has been weakening significantly, but is not yet at its September lows. US Treasury Secretary Bessent’s parody of “whatever it takes” has been met with a collective “whatever” from foreign exchange dealers. The politics of US support has been complicated by soybean concerns.