"Up till now, though, growth has been pretty good, with GDP rising at a 3.8% annual rate in Q2, a rate that might get even faster - potentially heating up inflation - now that the Federal Reserve has started cutting interest rates. Viewed in that context, one might conclude that a bit of a hit to GDP might not be such a bad thing."
"It's Day 2 of the Government Shutdown of 2025, and Treasury Secretary Scott Bessent is warning investors that "we could see a hit to the GDP, a hit to growth and a hit to working America." Perhaps this is why investors seem to be shrugging off the shutdown. Yesterday, the Vanguard S&P 500 ETF ( NYSEMKT: VOO) rose 0.4%. Today, the ETF is up another 0.3% premarket."
Day 2 of the 2025 government shutdown coincides with Treasury Secretary Scott Bessent warning of potential hits to GDP, growth, and working Americans. GDP rose at a 3.8% annual rate in Q2, and Federal Reserve rate cuts could further accelerate inflation, making a modest GDP hit less concerning to some investors. Equity markets showed modest strength as the Vanguard S&P 500 ETF ticked up. Berkshire Hathaway agreed to buy Occidental Petroleum's OxyChem division for $9.7 billion. Angiodynamics beat expectations and raised guidance. Analysts issued mixed calls, including a Nike upgrade and an Electronic Arts downgrade.
Read at 24/7 Wall St.
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