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The US government shutdown has dragged into its 33rd day, and while a solution may soon be imminent, economists have warned of a recession.
In a note to clients on Monday, Goldman Sachs Wist Alec Phillips It means that Statoff in Washington is likely to drop the US economy more than a full point of growth in the last quarter of 2025, shaving GDP growth to just 1.0%.
That is a significant reduction. Goldman had previously expected a strong finish to the year, but now believes the shutdown will lead to deferred spending, delayed hiring, and reduced investment.
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If the current mishaps are any guide, closings can be easy as well.
The prediction markets are followed by the CFTC betting platform controlled by Kalshi Peg for a fixed period of 45.9 days, or until November 15.
Currently, there is a 75% chance it lasts 40 days, and a 35% chance it goes beyond 50.
The shutdown created the longest government shutdown in US history, surpassing the 35-day shutdown in 2018-2019.
However, the pressure is increasing. Payments missed by air traffic controllers and TSA screens on Oct. 28, and another due Nov. 10, threatens another place of closure of flights, where flight delays are forced to temporarily compromise.
Meanwhile, SNAP food benefits, normally distributed the first week of each month, are in jeopardy — even though a recent court ruling allows for partial distributions.
Unlike previous shutdowns that target a specific agency, this one includes a full expiration on the entire recall, making it broader in scale and impact.
“This closure will have a significant economic impact on Record,” Goldman said in a note. “For a long time we could be swept into private sector activity, delaying investment and higher consumption.”
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The immediate damage is expected to come from the radiation of Federal employees and delays in government procurement.
If the shutdown were to continue for six weeks, Federal spending would be reduced to 1.3 percent in the first quarter of 2026, according to Goldman models.
Goldman Sachs sees growing signs the shutdown may end soon. The start of the ACA registration on November 1 is mainly focused on health care in health studies, while the election on November 4 and the upcoming Recess of DRMENTION CHERMESSION can change the political motivations. Civil unions, including AFGE, are now calling for a solution, adding pressure to Democrats and Republicans to reach an agreement.
So far, Democrats have opposed the funding bill, but polls show voters are increasingly suspicious of Republicans and President Trump. A possible compromise would include reopening the government now, with a promised vote on health studies before the November 21 deadline.
Goldman views major moves, such as breaking the senate filibuster, as possible. Still, with prediction markets pointing to a settlement by mid-November, momentum towards the stock appears to be building.
“We underestimate how long this shutdown will last,” said Alec Phillips. “But political and financial pressure is building, and the window for compromise is finally opening.”
Image: Shutterstock
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This article has been closed near the end – but the economic damage is mounting, Goldman says it originally appeared on Benzinga.com
