Economic Monthly
If It’s Fall, It Must Be 
Shutdown Season

Drew T. Matus Tani Fukui Shan Ahmed
SEP 27, 2023

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The U.S. political situation is back into economic focus as a government shutdown looms, with funding set to expire on September 30 if no short-term funding agreements are passed. We do not expect a shutdown to change the trajectory of Federal Reserve policy. The 10-year Treasury may decline slightly in the short-run as it generally has after a shutdown, but equity markets have historically had a mixed response. That said, a shutdown would be one more item on a list of economic uncertainties and recession concerns, and markets are looking more critically at the U.S. fiscal situation and credit quality.