In short
Podcast Notes: Big Take - What a Looming Shutdown Means for Markets
Podcast Overview Title: Big Take Description: The Big Take from Bloomberg News provides insights into what shapes the world’s economies through informed business reporting. Each episode brings context about stories that can move markets.
Episode Details Episode Title: What a Looming Shutdown Means for Markets Episode Description: The U.S. government is on the brink of its first potential shutdown in nearly seven years. This episode dissects the political dynamics among President Trump, the Republican Party, and Democrats, as well as the implications for the economy if a shutdown occurs.
Key Points from the Episode
Current Situation
- Deadline: The U.S. government faces a shutdown unless an agreement on a funding bill is reached by midnight on Tuesday.
- Stakeholders: President Trump and congressional leaders are at odds, with both parties attempting to assign blame for a potential shutdown.
Political Dynamics
- Democrats' Position: They are focusing on health care issues, particularly rising Affordable Care Act (ACA) premiums, which may impact millions of Americans if subsidies expire.
- Republicans' Position: They advocate for a clean stopgap funding bill to maintain government operations until November 21, intending to negotiate health care issues later.
Implications of Shutdown
- Federal Job Cuts: Unlike past shutdowns, the current situation might lead to mass layoffs rather than furloughs, which could have significant economic repercussions.
- Impact on Services: Government shutdowns typically result in furloughs for federal employees, but the Trump administration’s plans may create unprecedented job losses.
Historical Context
- Previous Shutdowns: The episode reflects on the history of 14 shutdowns since 1981, noting a trend of increasing commonality over the years. The longest shutdown occurred during the Trump administration in 2018-2019.
- Market Reactions: Historically, markets have largely shrugged off shutdowns, but this one is viewed as potentially more impactful due to the possibility of mass firings.
Key Discussions
- Healthcare Subsidies: Democrats argue that the rising costs of health insurance will have widespread economic effects, making their stance a critical leverage point.
- Trump's Stance: Trump indicated there would be no problem with a shutdown; he placed blame on the Democrats and expressed a strong position against negotiating.
Predictions and Consequences
- Market Response: While previous shutdowns have led to short-term disruptions, the unique nature of this potential shutdown could lead to more prolonged economic effects, especially if mass layoffs occur.
- Legislative Path: There is a possibility for a very short stopgap measure to keep the government running temporarily, but political tensions remain high.
Conclusion
- Final Takeaway: The looming government shutdown could disrupt not only federal employment but also critical economic indicators like jobs reports. Unlike previous shutdowns, the potential for significant job losses may lead to broader economic repercussions.
Additional Resources
- Further Reading: [US Economy Will Only Get Murkier If Key Data Is Delayed in Shutdown](https://www.bloomberg.com/news/articles/2025-09-29/us-shutdown-risks-delaying-economic-data-like-jobs-report-inflation?srnd=homepage-americas)
---
This structured summary captures the essence of the podcast episode while providing a comprehensive overview of the discussions, political dynamics, historical context, and potential implications of a government shutdown on markets and the economy.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00The thing about AI for business, it may not automatically fit the way your business works.
0:05Megan Scully:At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. Find home wherever you roam at Sinesta ES and Simply Suites. Stretch out and enjoy home-like amenities for however long you need. And when you're a Sinesta Travel Pass member, staying at Sinesta ES and Simply Suites means earning points toward free nights, upgrades, and more.
0:46Megan Scully:Go to Sinesta.com to book your stay and unlock their best rates with Sinesta Travel Pass. Here today, roam tomorrow. Join now at Sinesta.com. Terms and conditions apply. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better.
1:28Megan Scully:Find an agent at CINFIN.com. Bloomberg Audio Studios.
1:37David Gura:Podcasts. Radio. News.
1:39Megan Scully:36 hours? How far out are we?
1:41David Gura:36 hours, yeah. About 36 hours, yes. Not that I'm counting.
1:45Megan Scully:Not that you're counting. Megan Scully heads up Bloomberg's coverage of Congress, and she says if the White House and lawmakers can't agree to a funding bill by midnight on Tuesday, the U.S. government will shut down. Ahead of a meeting at the White House on Monday, President Trump and congressional leaders from both parties are staking out their positions.
2:05David Gura:These people are crazy, the Democrats. So if it has to shut down, it'll have to shut down.
2:09Megan Scully:We don't want to shut down the government. It's Trump who's doing it. So ask him.
2:13David Gura:What you have is everybody trying to shift the blame, Like who is going to be the one responsible politically for a shutdown, which seems increasingly likely as the hours go by.
2:24Megan Scully:Megan says the sticking points in negotiations come down to a couple key issues.
2:29David Gura:For Democrats, they have decided to centralize their message here on health care. Rising ACA premiums, that's the Obamacare premiums, that were kept at lower levels due to subsidies from the Biden administration. They're due to expire on January 1st. For Republicans, they are arguing that they want a so-called clean stopgap spending bill. They just want to keep the government funded until November 21st. And they said that they will negotiate on these ACA premiums and other demands from Democrats after they pass this bill.
3:04Megan Scully:Government shutdowns have become more and more common. But, Megan says, this one, if it comes to pass, would be very different. Aside from the usual fears of furloughs and delayed economic data, the White House has called for using a shutdown as a way to eliminate thousands of federal jobs, which could have a big impact on the economy.
3:24David Gura:In the last several years, we have seen markets largely shrug off the effects of a government shutdown. And what makes this one potentially more durable than previous shutdowns is the threat of mass firings.
3:36Megan Scully:Last week, the White House asked government agencies for plans to lay off, rather than furlough many non-essential workers if the government shuts down.
3:44David Gura:If tens of thousands or hundreds of thousands of U.S. government workers get laid off as a result of this shutdown, that means they do not get their back pay. They do not have jobs at the end of this. That will have a longer-term economic impact.
4:01Megan Scully:I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, as the U.S. gets closer and closer to another government shutdown, What's up for negotiation? What isn't? And why this shutdown could have a more significant impact on markets and the economy than we're accustomed to.
4:23Megan Scully:It's shutdown eve, eve, as Bloomberg's Megan Scully calls it. Democrats say they're not willing to budge on those Affordable Care Act subsidies. I asked Megan to explain why.
4:34David Gura:So they affect millions of Americans, and it would come with a bill of about$350 billion to increase these subsidies into the new year. That's a pretty hefty price tag, although it is something that Democrats say is necessary both financially but also economically. If a family's health insurance payments go up, double, triple in the new year, that obviously has widespread economic effects. For Democrats, they see this as a winning argument heading into the 2026 midterms when they're hoping to reclaim control of the House, the Senate or both. And wrapped up in this broader health care debate is, of course, the Medicaid cuts that were part of the huge Trump tax bill that passed on the backs of Republican only support earlier this year.
5:23David Gura:They're also demanding that these cuts get reversed. I think that is very unlikely to happen, but they are making it part of their broader messaging on this.
5:33Megan Scully:Given the fact that there are Republican voters who benefit from these subsidies, who rely on these subsidies, given the fact that this isn't just a blue state issue or a red state issue, are there Republicans who down the line conceivably would be willing to negotiate around this?
5:47David Gura:Yes, absolutely. And Republicans have said that they are willing to negotiate on this come November. but let's just keep the government open. Within the Republican ranks, you certainly have some who would be opposed to this, particularly I'm thinking of fiscal conservatives like the House Freedom Caucus who don't want to be spending this money. But what Democrats are saying is this is their biggest point of leverage. Republicans need 60 votes in the Senate to pass the stopgap spending bill. And for Democrats, they have the most sway now than they would have on a standalone, health care only bill.
6:23David Gura:So they see this as the best chance to get most of what they want.
6:27Megan Scully:Where is President Trump on these negotiations? Is he in line with Republicans in the House and Senate or does he have kind of a different perspective here?
6:34David Gura:You know, last week he said, you know, if there's a shutdown, there's a shutdown. It'll happen. This is all caused by the Democrats. He was supposed to meet last week with the Democratic leaders of the House and Senate that got canceled at the last minute. They are meeting today for the first time. The Republican congressional leaders will also be at this meeting. But we saw a little bit of a preview of that this morning with Carolyn Levitt, the White House spokesperson, really digging into the president's message and Republicans' message writ large, which is, it's our way or the highway. There is zero good reason for Democrats to vote against this clean, continuing resolution.
7:10David Gura:Either we pass the so-called clean CR or the government shuts down. Not expecting to see a whole lot of wiggle room coming out of this meeting today.
7:19Megan Scully:Megan says her expectations for how all of this will play out are based on years of reporting on past shutdowns and near shutdowns. They've become increasingly common over the last few decades.
7:30David Gura:There have been 14 shutdowns going back to 1981, which is when sort of the current, the modern era of shutdowns began.
7:40Megan Scully:Before 1981, all government employees still had to report to work when there was a shutdown. So the disruption to government services was minimal. The biggest impact was on government workers who didn't get paid.
7:53David Gura:The last shutdown we had was the 2018 to 2019 shutdown, the 35-day shutdown during Trump's first administration and the longest shutdown in U.S. history. Since then, we have certainly gotten to the brink of a shutdown more times than I can count. Pretty much any time there has been a funding deadline, it is at the 11th hour that an agreement comes through. We saw that most recently in March. But we have not actually seen a shutdown now in nearly seven years.
8:28Megan Scully:But this shutdown, if it happens, could look very different from any of those 14 previous shutdowns. That's coming up.
8:40Megan Scully:Support for the show comes from Public. Lately, it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On Public, you can build a portfolio of stocks, options, bonds, crypto, without all the bugs or the confetti. Retirement accounts, yep. High-yield cash, yes again. They even have direct indexing. Public has modern design, powerful tools, and customer support that actually helps.
9:15Megan Scully:Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.
9:34Megan Scully:involves risk of loss. See complete disclosures at public.com slash disclosures. Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now, and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools.
10:09Megan Scully:Looking for tips and advice? Their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. Here's a paradox. We buy insurance for peace of mind, yet the very policies we trust can deliver the biggest financial shocks.
10:45Megan Scully:Across America, millions of claims are denied every year, not because people did anything wrong, but because policies quietly excluded the things that happened. The psychology of trust tells us we assume the contract is fair, but in insurance, the information gap is massive. The insurer knows every detail of what's covered. The policyholder rarely does. That's where My Policy Advocate comes in. For just 27 cents a day, their platform reads your policies and shows you in plain language where you're vulnerable. They're not selling insurance. They don't do that. It's about transparency, giving ordinary people the same understanding insurance companies have had for decades.
11:21Megan Scully:Because when you know what's really in your policy, you can plan, protect, and avoid surprises. Before you trust your policy to protect you, let My Policy Advocate tell you what it really says. Visit MyPolicyAdvocate.com today. Peace of mind starts with knowing the truth. MyPolicyAdvocate.com
11:44Megan Scully:Last week, the White House sent a memo to federal agencies ahead of this looming shutdown, saying it would, quote, use this opportunity to consider reduction in force, that it would lay off employees in government programs that don't align with President Trump's priorities. So I asked Bloomberg's Megan Scully what we know about the jobs that are potentially at risk if the government does shut down.
12:05David Gura:So we don't know certainly exactly whose jobs are at risk. They did say, you know, programs that were not specifically authorized and jobs within the government that do not support Trump's broader agenda, both domestically and internationally. This is extremely, extremely unusual for a shutdown. Typically, what happens is most federal employees get furloughed. Some deemed essential must report to work without pay. At the end of a shutdown, thanks to a 2019 law that was passed during the last long shutdown, federal employees must receive back pay. We have never seen an administration use a shutdown as an opportunity to carry out a mass firing of the federal workforce.
Read the full transcript
12:50Megan Scully:Should we see that as the White House acting opportunistically or some other way? In other words, the White House could kind of do these layoffs in the way they have during the first few months of this, the president's second term. Why is this the mechanism that they're thinking of using here?
13:04David Gura:Russ Vogt, who is Trump's budget director, the chief of the Office of Management and Budget within the White House and also sort of the architect of Project 2025, which has been sort of the guiding principle of many of Trump's policies in his first term, is a firm believer in a strong executive and sees this as an opportunity for Trump to really exert executive authority. Government funding runs out on October 1st. That then gives the president the ability to make these mass firings that Congress did not do its job via the power of the purse, thus giving Trump the ability to do these. Of course, Trump's efforts to fire the federal workforce has been tied up in courts.
13:48David Gura:We've seen him win a lot of these arguments, a lot of these cases in court. But this is sort of a new way for him to go about this.
13:56Megan Scully:Thinking more about Russ Vogt's role here as the director of the Office of Management Budget, there's this more muscular approach to executive power. Certainly, these layoffs, potential layoffs are a part of that. In the past, we've also relied on OMB for detail about what's supposed to happen if there is a shutdown. And I gather this time around, we're not getting a lot of clarity about the way that OMB is thinking about contingency planning.
14:19David Gura:Yes. So typically, by this point on shutdown eve, eve, we would have agency by agency documentation of what will happen, who is considered an essential employee, and who is not. Federal workers would start signing off on these shutdown plans, would be making their plans for when they leave work tomorrow if the shutdown does, in fact, go into effect. It certainly feels like this is very late to the game, especially because under law, federal employees who are non-essential need to start signing off on paperwork saying they will not be working during the shutdown.
14:59Megan Scully:Is there a risk that this government might not be ready to shut down by this deadline if they're not where they should be in terms of preparations for one?
15:07David Gura:They don't really have a choice, thanks to the Anti-Deficiency Act. When the shutdown comes, the government is shut down aside from essential personnel. We already know sort of the broad contours of who are the essential workers. Active duty military is considered essential workers. Emergency workers like FEMA, as well as air traffic controllers, all considered emergency employees. So, you know, that's pretty much set. There is some concern, though, that this will certainly be more disruptive and more chaotic because of the absence of planning and communication to the federal workforce. So this has rippling effects across the country.
15:44David Gura:People not knowing whether they need to report to work or not on Wednesday certainly is disruptive and just kind of adds to the chaos of an already turbulent event.
15:56Megan Scully:In March, the country faced another funding deadline. Senate Minority Leader Chuck Schumer warned that a shutdown would allow the administration to, quote, destroy vital government services at a significantly faster rate than they can right now. He ultimately decided to vote to fund the government to avoid that scenario. And he faced a lot of blowback for that decision from progressives within the Democratic Party. This time, Megan says, he's taking a very different approach.
16:24David Gura:Going back to March, the last time we were at this funding stalemate, Schumer at the last minute decided that Trump, who was only two months into his second term at that point, was too powerful to risk it politically for the party. And so a minority of Democrats in the U.S. Senate voted with Schumer to avert a shutdown. That immediately prompted blowback from progressives within the party who saw this as Senate Democrats really just acceding to Trump and to Republicans. Schumer personally had his own book coming out that same week, and he had to cancel his book tour due to the tremendous backlash he was receiving.
17:05David Gura:So I think it's fair to say he learned his lesson that time around. Should also note that Trump's approval ratings have been sort of on a decline in the intervening six months, giving Schumer more ability to really risk it here. And we are also inching closer to the 2026 midterms. Democrats are seeing this more as an opportunity to stand up to the Trump administration. and politically for them, that is more of a net positive than it was six months ago.
17:36Megan Scully:I'm very curious sort of what you see as potential off-ramps here. So there is this meeting on Monday at the White House among congressional leadership and the president with just hours to go here till funding runs out. How do you see this playing out or what are the ways in which it could play out in the next few hours?
17:52David Gura:I think that the most likely scenario here is that the government shuts down at 12.01 a.m. on October 1st. There is, I would say, a potential for them to come out of this meeting and agree to a very short stopgap spending bill, something in the order of a week or two, and say, you know, we will vote in the Senate today to keep the government open until October 7th or October 10th to avert a shutdown this week. but Democrats saying we are not going to agree to this longer seven-week stopgap that Republicans have demanded. If that were to happen, the Senate could vote on that tonight, and the House, which it's important to note, are out of town until October 7th, they could then vote by unanimous consent, sort of in absentia, to keep the government open.
18:49David Gura:And as provided nobody objects to that, then that could certainly be the band-aid for the next week or so. Especially as storms threaten the southeast coast right now, that is certainly a possibility that we should not discount. But partisan tensions being what they are at this moment, I am not banking on that.
19:11Megan Scully:Megan, how do you think about the potential consequences of all of this to markets and the economy? And looking at those past shunt ends we've talked about, what impact have they had? And when does it really become an issue for investors and for the U.S. economy broadly?
19:26David Gura:So a shutdown is not the market-rattling catastrophe that, say, a debt ceiling breach would bring about. But it certainly is disruptive, at least in the short term. In the last several years, we have seen markets largely shrug off the effects of a government shutdown. And we have seen that in the run-up to this one. What we could see sort of in the immediate aftermath of a shutdown is some short-term market consequences. and certainly some short-term economic consequences.
19:59Megan Scully:For example, if there is a government shutdown, the jobs report won't come out on Friday when it's scheduled to.
20:05David Gura:That certainly is a huge indicator of where the economy is and where it's going. And not having that then has effects on what decisions people make in the short term on their finances and on their investments. Typically, though, in a government shutdown, any economic effect or market effect is short-lived, even during the 35-day shutdown of 2018 and 2019.
20:31Megan Scully:Again, that's for the typical government shutdown. But like we've been saying, this time could be different. If the White House follows through on its plan to use the government shutdown as a way to further reduce the federal workforce, if those workers lose their jobs instead of merely being furloughed with back pay, the economic consequences of this government shutdown could have a much bigger impact.
21:18Megan Scully:Sinesta Travel Pass is the most rewarding way to travel. Sign up at Sinesta.com for instant savings, bonus points, and perks like early check-in, late checkout, room upgrades, and free stays. Choose from 1 ,100 hotels across 13 brands and unlock their best rates when you book with Sinesta Travel Pass. Here today, roam tomorrow. Join now at Sinesta.com. Terms and conditions apply. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention.
22:01Megan Scully:When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward.
22:36Megan Scully:The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at CINFIN.com.
23:06Megan Scully:a mid-market exchange rate on every conversion. Whether you're receiving payments from tenants abroad, earning as a digital nomad, or converting dividends from your international investments, the WISE multi-currency account is for you. Be smart. Get WISE. Download the WISE app today or visit WISE.com. Terms and conditions apply.
From the publisher
The US government is facing its first potential shutdown in nearly seven years, and the clock is ticking.
On today’s Big Take podcast, Bloomberg Congress editor Megan Scully and host David Gura break down the political incentives for President Trump, the Republican Party and for Democrats — and discuss what’s at stake for the economy if a shutdown comes to pass.
Read more: US Economy Will Only Get Murkier If Key Data Is Delayed in Shutdown
See omnystudio.com/listener for privacy information.
