Funding standoff in Washington |
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This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Every Monday, Bloomberg Intelligence senior analyst Nathan Dean gives his insights into what’s been happening and what’s coming up in the nooks and crannies of government and markets. Sign up here and follow us at @bpolitics. Email our editors here. | |
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As you can imagine, the number one topic at the flag football fields of northern Virginia this past weekend was the government shutdown and when it’s going to end. Polymarket has it at a 75% chance of ending Oct. 15 or later. With a fifth vote on a stopgap bill coming tonight – and likely failing – both sides, in my opinion, continue to believe they are “winning.” And that mentality keeps the government shut. What can change it? Missed paychecks – Oct. 10 and Oct. 15 for government employees and the military respectively. That will ramp up pressure. The calculus could also change if President Donald Trump follows through on his threat to fire government workers. On that, here’s Catherine Lucey and Erik Wasson with “White House Ups Pressure on Democrats If Shutdown Persists.” I’d also recommend Max Chafkin and Stacey Vanek Smith with their deep dive on Office of Management and Budget Director Russ Vought: “Shutdown Gives Trump Administration a Chance at DOGE 2.0.” Finally, I organized a call this morning with analysts from the three research teams at Bloomberg — Bloomberg Intelligence, Bloomberg Economics and BloombergNEF – in which we discussed the key things for investors to know about this shutdown. One of the many things I learned from our call is that as long as the shutdown is over by mid-November, there shouldn’t be much economic impact. Here’s the replay via the Balance of Power podcast. On non-shutdown news, we’re waiting for Treasury Secretary Scott Bessent to announce any day now an aid package for US farmers. The story from my colleagues on the agriculture beat is that the aid will provide farmers short-term working capital for seed and fertilizers, but long-term questions, especially on soybean prices and China, still exist. Here’s Alexis Maxwell with her note for subscribers on the Bloomberg Terminal. Tidbits | |
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Trump said 25% duties on medium- and heavy-duty trucks would begin Nov. 1, the latest expansion of his tariff regime aimed at protecting domestic industries. A federal judge declined to quickly issue a temporary order blocking the Trump administration’s plan to deploy the National Guard to Chicago, while urging the government to delay the plan until she rules. If the Supreme Court overturns Trump’s signature tariffs it would unleash a bureaucratic nightmare involving reams of refund paper checks to companies for billions in duties collected so far. The Supreme Court rejected a bid by Ghislaine Maxwell to overturn her 2021 sex-trafficking conviction for grooming teenage girls who were abused by disgraced financier Jeffrey Epstein. A federal judge in Maryland denied the Justice Department’s request to pause Kilmar Abrego Garcia’s deportation fight during the government shutdown. The Supreme Court turned away an appeal by ticketing giant Live Nation in a consumer antitrust suit, dealing a blow to the company’s effort to manage its antitrust woes by channeling cases into arbitration. White House AI czar David Sacks defended the Trump administration’s approach to China and said it was essential for the US to dominate artificial intelligence. Trump is pressing Israel and Hamas to secure a settlement to the two-year conflict that’s devastated Gaza and destabilized the Middle East, with the warring sides starting mediated negotiations. Bloomberg Economics Washington: Join us Oct. 14 for a deep dive into the outlook for the economy and what it means for the Federal Reserve. Register here. | |
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Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., host Joe Mathieu interviewed Republican Representative Nicole Malliotakis of New York about the standoff over funding that’s shut down much of the government. On the program at 5 p.m., he talks with Representative Tom Emmer, the third-ranking House Republican, about next steps for the GOP in dealing with the government funding impasse. On the Big Take podcast, Bloomberg’s Elizabeth Rembert discusses what happens with colleges and universities address dwindling student enrollment and tight finances by opening their doors to contracts with retirement communities, on or near campus. Listen on iHeart, Apple Podcasts and Spotify. | |
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Banks in the US have been increasingly modifying commercial real estate loans as more borrowers encounter financial difficulty. The modifications can include principal forgiveness, an interest rate reduction, a significant payment delay, a term extension or any combination of those changes. As of June 30, banks reported a 66% increase in the total value of commercial real estate loan modifications over the last four quarters, according to the Federal Reserve Bank of St. Louis, which tracked changes to the terms of the loans, including those not in compliance with their modified terms. The Fed researchers say that modifications to commercial loans are worth paying attention to because of the risks of losses for borrowers and banks as well as the potential impact on municipalities from tax revenue losses. — Alex Tanzi | |
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Trump meets with Canadian Prime Minister Mark Carney at the White House tomorrow. Consumer borrowing data from the Federal Reserve is scheduled for release tomorrow. Minutes from the Federal Reserve Open Market Committee’s September meeting are released Wednesday. Nobel Prizes are awarded this week with the Peace Prize announced on Friday. The University of Michigan’s preliminary reading of consumer sentiment in October is out Friday. The summit of the Association of Southeast Asian Nations opens Oct. 26 in Malaysia. | |
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- Trump's immigration crackdown has diverted thousands of federal agents from drug, sex trafficking and organized crime investigations, resulting in a decline in prosecutions, the Wall Street Journal reports.
- Millions of disability claims paid by the Department of Veterans Affairs are for minor or treatable afflictions such as hair loss or eczema, collectively costing billions of dollars a year, the Washington Post reports.
- The number of international students entering the US in August dropped by almost 20% from the same time last year as the administration delays visas and instituted travel restrictions, the New York Times reports.
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