Goldman Sachs says a 2 to 3 week November US government shutdown is its base case

<p>Goldman Sachs notes after the US House elected a speaker. Finally. </p><ul><li>The election of a speaker does not substantially change our view on a shutdown in Q4. While operating under a temporary speaker created uncertainty, if the November 17 deadline had been reached with only a temporary speaker, the most likely outcome would have been another temporary extension, we think. </li><li>With a newly elected speaker, it seems likely that House Republicans will press to cut spending by up to $120bn, which will make a longer-term spending deal difficult. </li><li>Differences over Ukraine funding will also likely complicate spending talks. That said, recent developments in Israel lower the odds of a shutdown in November, all else equal. </li><li>For now, we view a shutdown in November as a close call but retain a shutdown of up to 2-3 weeks as our base case, reducing GDP growth in Q4 by around 0.5pp and adding the same amount in 2024Q1.</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.