Goldman Sachs: US government may shut down for 2-3 weeks in November.
Goldman Sachs believes that the imminent government shutdown in November will last for 2-3 weeks, which will result in a decrease of approximately 0.5 percentage points in the GDP growth rate for the fourth quarter of the United States. This decline is expected to continue at the same magnitude in the first quarter of next year.
After the new Speaker of the House was elected in the United States, Goldman Sachs issued a warning that the government shutdown in November could last for 2 to 3 weeks.
According to media reports on Thursday, Goldman Sachs pointed out that the election of the new Speaker did not actually change its view on the government shutdown in the fourth quarter.
Although there will be uncertainty under the interim Speaker, if there is only one temporary spokesperson by the deadline of November 17, the most likely outcome is another extension of the government spending budget.
Goldman Sachs believes that under the leadership of the new Speaker, Republicans in the House of Representatives are likely to pressure Democrats to cut spending by up to $120 billion, making it difficult to reach a long-term spending agreement.
The disagreement over funding for Ukraine could also complicate spending negotiations. Nevertheless, recent developments in Israel have reduced the likelihood of a government shutdown in November.
For now, Goldman Sachs believes that a government shutdown in November is imminent and expects it to last for 2 to 3 weeks as a baseline scenario. This will result in a decrease of approximately 0.5 percentage points in the GDP growth rate for the fourth quarter of the United States and maintain the same magnitude in the first quarter of next year.
According to CCTV News, on the 25th local time, Republican Congressman Mike Johnson from Louisiana won 220 votes in the election for Speaker of the House of Representatives and was elected as the new Speaker. Johnson is currently the Vice Chairman of the Republican House Conference and was selected as the Republican candidate for Speaker of the House on the evening of the 24th.
At the end of September, the United States Senate "at the last minute" passed a short-term spending bill to avoid a government shutdown, extending government funding for 45 days until mid-November. The bill includes $1.6 billion in disaster relief measures, but does not include aid to Ukraine or the border security measures sought by Republicans.