Record shutdown ends; Fed in focus
Summary
With the government shutdown over, attention shifted to catching up on delayed data and new economic releases. Recent comments from Federal Reserve officials reduced the likelihood of a third rate cut this year, prompting markets to sell off late last week.
The S&P 500 ended nearly unchanged, up 0.1% for the week. November has been challenging so far, with the index down 1.5% month to date, though it remains up 15.8% year to date. The 10-year U.S. Treasury yield rose three basis points to 4.11%.
The shutdown is over, now what?
President Trump signed legislation late Wednesday ending the 43-day government shutdown, the longest in U.S. history. The Congressional Budget Office estimated that the shutdown will trim roughly 1.5 percentage points from fourth‑quarter GDP and may permanently subtract $7-14 billion from output.
The closure prevented agencies such as the Bureau of Labor Statistics (BLS) from collecting data and delayed numerous economic reports. The most anticipated release is the September jobs report, originally due in early October, which is now scheduled for Thursday, November 20, 2025. Other postponed releases include wholesale inflation, retail sales, and GDP for September.
October inflation data, including CPI and PPI, rely on surveys that were not conducted and may be incomplete or not released at all. Economists expect data normalization to take until January. Many have urged the BLS to prioritize November employment and inflation ahead of the December 10 FOMC meeting.
Hawkish Fed rhetoric weighs on markets
Federal Reserve officials signaled a cautious approach toward further rate cuts. Kansas City Fed President Jeffrey Schmid said inflation remains “too hot” and indicated he might again dissent if the committee votes to lower rates in December. Alternate members Neel Kashkari, Lorie Logan, and Beth Hammack also voiced opposition to the October cut.
These statements led markets to scale back expectations for another cut in December, with the implied probability falling below 50%, down from roughly 67% earlier in the week and more than 90% a month ago.
The week ahead
This week’s focus will be the long-awaited September jobs report, due Thursday. Investors will also scrutinize the FOMC minutes and Nvidia’s third-quarter earnings call this week. With postponed data releases still working through the pipeline, markets may experience elevated volatility.
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