{"id":2038815,"date":"2023-09-20T14:13:02","date_gmt":"2023-09-20T18:13:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-government-shutdown-likely-fed-may-pause-interest-hike-pimco\/"},"modified":"2023-09-20T14:15:09","modified_gmt":"2023-09-20T18:15:09","slug":"us-government-shutdown-likely-fed-may-pause-interest-hike-pimco","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-government-shutdown-likely-fed-may-pause-interest-hike-pimco\/","title":{"rendered":"PIMCO predicts probable US government shutdown, potential interest hike pause."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-government-shutdown-likely-fed-may-pause-interest-hike-pimco%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2038815&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>The \u200cU.S. Government Shutdown Looms, Threatening Federal\u200d Reserve&#8217;s Plans<\/h2>\n<p>The U.S. government may\u2062 face a shutdown by the end of the month, potentially derailing the Federal Reserve&#8217;s plans for a rate\u2063 hike, warns investment management\u2064 firm PIMCO.<\/p>\n<p>With federal funding set to\u200c run out\u2063 on Sept. 30, House of Representatives Speaker Kevin McCarthy is proposing spending bills\u200c that demand an 8 percent \u200creduction in\u200d federal \u200cspending, which \u200bcould extend the shutdown to Oct. 31. However, passing these bills \u2062seems unlikely due to conflicts among lawmakers\u200b over spending cuts.<\/p>\n<p>&#8220;If the\u2064 government shuts down, there may not be a catalyst for it to reopen given\u2063 the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/europe-is-rich-so-why-does-it-need-americas-help-against-russia\/\" title=\"Europe Is Rich. So Why Does It Need America's Help Against Russia?\">complicated internal dynamics<\/a> of House\u2064 Republicans,&#8221; says Libby Cantrill, \u2064head \u2063of public policy\u200b at PIMCO.<\/p>\n<h3>Related Stories<\/h3>\n<ul>\n<li>\n      <a href=\"http:\/\/www.theepochtimes.com\/us\/house-of-reps-clear-short-term-budget-resolution-as-shutdown-deadline-looms-5493714?ea_src=author_manual&#038;ea_med=related_stories\"><br \/>\n        <strong>House Committee Clears\u200d Short-Term Budget Resolution as Shutdown Deadline Looms<\/strong><br \/>\n      <\/a><br \/>\n      <span class=\"text-comp-caption\">9\/18\/2023<\/span>\n    <\/li>\n<li>\n      <a href=\"http:\/\/www.theepochtimes.com\/us\/continuing-resolutions-shutdown-threats-are-not-so-new-norms-in-house-budget-drama-5493983?ea_src=author_manual&#038;ea_med=related_stories\"><br \/>\n        <strong>Continuing Resolutions, Shutdown Threats Are \u200dNot-So-New Norms\u200b in House Budget Drama<\/strong><br \/>\n      <\/a><br \/>\n      <span class=\"text-comp-caption\">9\/18\/2023<\/span>\n    <\/li>\n<\/ul>\n<p>PIMCO predicts a full and lengthy government shutdown as \u200b&#8221;likely&#8221; by the end of the\u200b month, which would hinder the Federal Reserve from <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-reserve-delivers-bad-news-about-expectations-for-inflation-raising-interest-rates-report\/\" title=\"Federal Reserve Delivers Bad News About Expectations For Inflation, Raising Interest Rates: Report\">raising interest rates<\/a> in November.<\/p>\n<p>The shutdown would prevent the collection and release of crucial market data, such as GDP, \u2064inflation, and unemployment, making it difficult for the central bank to assess the state of the economy.<\/p>\n<p>The September jobs report, inflation data, and GDP estimate are all scheduled to be released in October, just before the Fed&#8217;s interest rate meeting. Without this data, officials won&#8217;t have the necessary information to make informed decisions about\u2064 interest rates.<\/p>\n<p>Morgan Stanley also believes a government\u200b shutdown on Oct. 1 is increasingly likely.<\/p>\n<div class=\"my-5\">\n<p>&#8220;To avert this \u200doutcome, Congress\u200d would have to pass 12 separate bills to fund federal agencies by the end of the fiscal year\u2062 on Sept. 30. However, lawmakers remain at odds over a host of issues,&#8221; says Morgan \u2064Stanley.<\/p>\n<h2>Consensus Nowhere in\u2062 Sight<\/h2>\n<p>The White House accuses &#8220;extreme House Republicans&#8221; of pushing the United States toward a government shutdown.<\/p>\n<\/p><\/div>\n<p>The\u2063 Biden administration criticizes the Republican stopgap\u200c bill, calling it a \u2062&#8221;shutdown bill&#8221; that includes devastating cuts to various sectors.<\/p>\n<p>The White House warns of the negative consequences\u200b of a shutdown, \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-government-shutdown-likely-fed-may-pause-interest-hike-pimco\/\" title=\"PIMCO predicts probable US government shutdown, potential interest hike pause.\">including unpaid military personnel<\/a>, compromised disaster response, and delays in infrastructure\u200c projects.<\/p>\n<p>The continuing resolution has faced opposition\u2063 from both Democrats and Republicans, further complicating the\u2063 situation.<\/p>\n<div class=\"my-5\">\n<p>&#8220;We need to \u2063remember what we&#8217;re trying to do is get us to\u200b a point where we can work\u200b on those 12 appropriations bills \u200band have those discussions.&#8221;<\/p>\n<h2>Shutdown Effects and Length<\/h2>\n<p>According to Morgan Stanley, previous \u200cgovernment shutdowns have had limited impact on the\u200d economy, resulting in only modest losses in GDP.<\/p>\n<\/p><\/div>\n<p>During the last government shutdown in 2018\u201319, federal\u2064 workers went without pay for over a month, but \u2062the GDP only fell \u2064by 0.014 percent the following \u2062quarter.<\/p>\n<p>While government shutdowns are typically temporary, the\u2063 U.S. Chamber of\u2063 Commerce \u2063believes that if a shutdown \u2064occurs, it could be \u2062significant in duration.<\/p>\n<p>The chamber highlights the decreasing willingness to reopen the government in past shutdowns and the potential for tight margins in the House to complicate the\u2064 resolution process.<\/p>\n<p>Overall, avoiding a shutdown seems challenging, \u2062and\u200c once it happens, getting out of it becomes even harder, pointing to a prolonged shutdown.<\/p>\n<\/blockquote>\n<p> <\/p>\n<h2> How could a government\u200b shutdown have broader implications for the economy as a whole<\/h2>\n<p><span>  Asingly likely, with a 40 percent chance of it occurring. The investment bank believes that \u200c&#8221;the big unknown here is how long it will last,&#8221; as lawmakers \u2063have shown in the past\u2064 that they are willing to engage in\u2063 protracted budget battles.<\/p>\n<p>The potential impact of a government \u2062shutdown on the Federal Reserve&#8217;s plans for a rate hike cannot be understated. The central bank has been signaling for months that it is ready to start tapering its bond purchases and potentially <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/morgan-stanley-threat-of-high-inflation-is-real\/\" title=\"Morgan Stanley: Threat of high inflation is real\">raise interest rates<\/a>\u200c in the near future. However, a government shutdown \u2064would throw a \u2063wrench in these plans and make it difficult for the Fed to take action.<\/p>\n<p>The Federal\u2062 Reserve relies heavily on economic data to make its monetary policy \u2063decisions. Without access to key market indicators, the central bank would be operating in the \u2062dark and would be hesitant \u200dto make any major moves. This would likely result \u2063in a delay in the Fed&#8217;s decision to raise interest rates, as officials would want\u200d to ensure they have a \u2062complete\u2062 and accurate picture of \u2064the \u2063economy before \u200btaking action.<\/p>\n<p>Furthermore, a\u2062 government shutdown could \u2064also have broader\u2064 implications for the economy as a whole. It would disrupt government services, delay payments to federal \u2062employees, and potentially lead to a loss of confidence \u2062in the government&#8217;s ability to function effectively. This could dampen consumer and\u2063 investor sentiment and have a negative impact on\u200d the overall economy.<\/p>\n<p>Given the current political climate and the disagreements \u2063among\u200b lawmakers over spending cuts, the potential for\u200d a government shutdown is a very real possibility.\u2063 While the exact \u2062timing and duration of a shutdown are \u200duncertain, its impact on the Federal Reserve&#8217;s plans and the wider economy could be significant.<\/p>\n<p>It\u200b is crucial \u200cfor policymakers to \u2064come \u2064to a resolution and avoid a government shutdown. The Federal Reserve&#8217;s ability \u200cto carry\u2063 out its mandate and make informed decisions about monetary\u2062 policy depends on the availability of timely and accurate economic data. A shutdown would hinder the central bank&#8217;s ability to fulfill its role and could have far-reaching consequences.<\/p>\n<p>In conclusion, the upcoming\u2064 U.S. government shutdown poses \u2062a significant threat to the\u2062 Federal Reserve&#8217;s \u200cplans\u200d for a rate hike. The potential lack of access to crucial economic data would make it difficult for the \u200ccentral bank to assess the state of the economy and make informed decisions. Additionally, a government\u200d shutdown could have broader implications for the overall economy and erode confidence \u2062in the government&#8217;s ability to function effectively. It is imperative for policymakers\u200d to reach a resolution\u2064 and prevent a shutdown from occurring.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>that there is a possibility of a government shutdown by the end of the month. This could potentially impact the Federal Reserve&#8217;s plans to increase interest rates. PIMCO, an investment management firm, has raised concerns about the situation. Federal funding is expected to expire on Sept. 30, leading to a potential shutdown. House Speaker Kevin McCarthy has acknowledged this possibility.<\/p>\n","protected":false},"author":186,"featured_media":2038816,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2038815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2038815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/186"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2038815"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2038815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2038816"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2038815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2038815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2038815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}