CBO on Macro Effects of the Shutdown




From ” A Quantitative Analysis of the Effects of the Government Shutdown on
the Economy Under Three Scenarios, as of October 29, 2025″:

In CBO’s assessment, the shutdown will delay federal spending and have a negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends. The agency estimates that real gross domestic product (GDP), which has been adjusted to remove the effects of inflation, will be lower in the fourth quarter of 2025 than it would have been in the absence of a shutdown.2 Depending on its length, the government shutdown will reduce annualized real GDP growth in that quarter by 1.0 to 2.0 percentage points. After the shutdown, real GDP will be temporarily higher than it would have been otherwise. Although most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion (in 2025 dollars) will not be.

Here are impact estimates under three scenarios:

Current betting (10:30am CT on 10/29) on Kalshi for the shutdown duration is 46.7 days, or nearly 7 weeks.



This entry was posted on by Menzie Chinn.



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