Overview

• Funding lapsed after Senate Democrats blocked a House stopgap under the 60‑vote threshold, triggering federal agency contingency plans.
• Hundreds of thousands of federal employees are furloughed or working without pay, and contractors face losses with no back pay.
• Economists such as Justin Wolfers characterize the macro impact as modest and largely political theater based on past shutdowns.
• Others, including Mohamed El‑Erian and Larry Kudlow, warn this episode could differ as the White House signals large‑scale firings labeled “DOGE 2.0.”
• A likely pause of key reports, including the monthly jobs data, could complicate the Federal Reserve’s October policy read even as markets historically show minimal reaction.