MSD Weekly Market Update: Week Ending October 3, 2025
The main event of the past week has been the still-ongoing, as of this writing, federal government shutdown. All in all, the markets thus far have remained calm in response to it and await further news. There could certainly be negative economic impacts in the short-term; in past episodes, the negative impacts were reversed in subsequent quarters once workers returned and back paychecks were received and spent. From the Fed’s perspective, the shutdown comes at an inopportune juncture, given that the October 29th FOMC is “live”, and so the Fed ideally would need fresh data to determine its rate policy. This week’s initial claims and employment situation reports have been delayed due to the shutdown. Other reports released during the week portrayed a softening labor market and a continued cool manufacturing sector.