A deal has been reached in the US Senate to sign a continuing resolution (CR) to reopen the federal government.
The US government essentially shut down on October 1st after Congress failed to pass a CR on September 30th. This is the longest period the federal government has been paused.
The “clean” CR Republicans proposed was denied by Senate Democrats, who wanted to add $1.5 trillion in new spending before they agreed to a resolution.
Approximately 800,000 federal employees were furloughed, working without pay or not showing up. This impacted critical federal programs like air traffic controllers and food assistance programs.
Last night, seven Senate Democrats and one Independent agreed to join the Republicans in reopening the government, bringing the vote to the 60 needed to pass the bill. Now, the legislation will move to the House, which is expected to approve it before heading to the President’s desk for his approval.
Many Democrats disagreed with their brethren who voted to reopen the government. Extreme leftist Senator Elizabeth Warren called a vote for the bill a “mistake.”
As Congress’s public approval is trolling all time lows, business sentiment is also on the decline.
S&P Global reports that business activity expectations are dim, and inflation expectations are for it to rise.
Paul Smith, Economics Director at S&P Global Market Intelligence, shared that business confidence declined in October and is now parked at the lowest level in one year.
“In line with recent surveys, tariffs and trade impacts remain a notable concern, and have led to an uplift in cost inflation expectations which are now running at their highest since mid-2024,” said Smith, wh0 added that goods producers were more upbeat than service providers as opportunities related to trade protectionist possibilities, especially with manufacturers, and expectations of reshoring may lead to increased industrial production in the year ahead.
“Nonetheless, the air of uncertainty that pervades private sector companies is highlighted by the data on investment, with capital expenditure plans subdued and R&D spending expected to decline,” Smitth said. “Limited corporate profitability growth is also anticipated, as competitive pressures weigh on the ability of companies – especially service providers – to fully pass on their higher operating costs to clients.”
