The Shutdown’s Economic Impact

In this episode of Goldman Sachs Exchanges, Allison Nathan interviews Alec Phillips, Chief Political Economist at Goldman Sachs Research, about the US government shutdown. They discuss how this shutdown differs from previous ones, focusing on the reversed party situations and the potential breadth and duration of the current shutdown. Alec shares insights on who might be blamed politically and the potential impact on the midterm elections. He estimates the economic impact, including effects on GDP, federal employees, and data releases, and also touches on how the Federal Reserve might react given the missing economic data. The conversation concludes with a discussion of the longer-term implications of frequent shutdowns and the potential for a resolution.