This week’s US data docket would be light even if government reports weren’t suspended for the shutdown, which is to say traders won’t be missing much if the funding lapse drags on.
There was scant evidence early Sunday to suggest the standoff in D.C. was any closer to being resolved, and headlines from Donald Trump’s America were in places surreal.
The administration’s sending hundreds of National Guard troops to Chicago, ostensibly to “protect” an immigration processing center where federal agents scuffled with locals protesting Kristi Noem’s presence at the facility. Tear gas and pepper balls were deployed by the agents against the crowd before Chicago police eventually showed up to separate the two sides.
JB Pritzker doesn’t want the troops and says they aren’t necessary. “State, county and local law enforcement have been working together and coordinating to ensure public safety,” he said. In another incident, a Chicago woman was shot by government agents in what the administration called a “ramming” incident with a law enforcement vehicle. Apparently, she was armed.
In Oregon, a federal judge issued a restraining order against Trump to prevent the deployment of 200 National Guard troops to Portland, where protestors regularly gather around an ICE facility. An attorney for the state described the administration’s determination to station soldiers in the city as “one of the most dramatic infringements on state sovereignty in Oregon’s history” — an intolerable affront to the principles of federalism if ever there was one. The judge in the case, who was appointed by Trump, agreed that the administration’s plans weren’t likely “conceived in good faith.”
This isn’t going to stop and in the event the administration ultimately succeeds (by way of higher court rulings) in deploying more soldiers to more cities, the odds rise that a tense moment results in National Guard troops shooting protestors. I don’t think it’s a stretch to suggest Trump’s hoping for just such an outcome. Certainly, he’s making it more likely.
Chaos and lawlessness are undesirable, but putting actual troops in close proximity to an irritable populace is a dangerous thing, and the optics are very bad for democracy. In the simplest terms: Domestic law enforcement isn’t the purview of the military.
Meanwhile, every day that passes without a resolution to the shutdown is another day closer to Russ Vought’s layoffs. By Trump’s own account, The White House and the OMB spent a fair amount of time last week combing through “Democrat things” to determine who and what might be cut permanently.
Last week, government employees who accepted the terms of the administration’s “deferred resignation program” instituted during the initial, Elon Musk-assisted purge of the bureaucracy fell off federal payrolls resulting in some 100,000 resignations. Now Trump’s tapping Vought to pick and choose who among three quarters of a million Americans furloughed in the shutdown should be let go permanently, which is to say not rehired when the funding gap’s resolved.
Although the vast majority of furloughed workers will obviously be brought back, firing even a fraction of them would mean thousands of lost jobs. Eventually, you’d expect some of these actions to show up in jobless claims and ultimately in the monthly jobs report, which was of course suspended along with the rest of the government macro data last week.
Researchers at UVA, Emory and Stanford suggested in August that furloughed federal workers are about a third more likely to quit their government jobs during or following a shutdown. “[T]he costs of government shutdowns exceed their direct costs that are often the focus of policymakers,” they wrote. “Shutdowns cause high skill employees to leave public service, this lost workforce is not replenished and the cost of hiring outside contractors as well as lost output far exceeds any savings from lower payroll costs.”
This is just about the last thing the US labor market needs at a time when private sector employers are trimming payrolls and hiring plans are the slowest since the financial crisis.
Consider also that the shutdown may introduce procedural complications around payouts for recently-“retired” government employees. In a piece published over the weekend, the Wall Street Journal described the plight of a former USDA employee who “started a career coaching business for fellow federal workers” but who’s now “worried that her pension will be delayed by the shutdown.” Her solution: “She took a bartending class and signed up to potentially walk dogs on Rover just in case.”
Coming full circle, the only tradable macro events on the calendar this week in the US are the release of the September FOMC minutes and the preliminary read on University of Michigan sentiment for October. “Every day that passes without a reopening deal increases the potential negative ramifications for the real economy,” BMO’s Ian Lyngen remarked.
“Interpreting the news flow is further complicated by the fact that Trump has signaled the possibility that the federal government doesn’t rehire all the furloughed workers,” Lyngen went on, in the same note. “A partial rehiring would be unprecedented and likely lead to a fresh round of legal challenges, although that hasn’t prevented many of the administration’s more dramatic actions thus far.”


“Shutdowns cause high skill employees to leave public service, this lost workforce is not replenished and the cost of hiring outside contractors as well as lost output far exceeds any savings from lower payroll costs.”
Yes- I know several people who have experienced the following (even without a shutdown)-
Person X, who works for the Federal Government, does job A at a certain salary ($P). Person X quits working for the Federal government and goes to work for consulting firm B. The government hires consulting firm B to provide workers to fulfill needs that the government doesn’t have the right people hired directly to meet. Person X, who now works for Consulting Firm B, goes back to the exact same job (job A), except now he makes $Px150% (I have no idea what the government pays Consulting firm B- but obviously more than what they previously paid person X).
Same co-workers for Person X, except that payroll checks are now coming from the consulting firm B.
I know several people who have done this.
I didn’t make this up.
Except, my wife has had no work since January due to DOGE cuts. So not everyone benefits from a government shutdown…or any of the decisions this administration has made over the last nine months.
“I don’t think it’s a stretch to suggest Trump’s hoping for just such an outcome.” Another opportunity to spend a day in front of the television a la Jan. 6 egging on his team, but this time with more coordinated uniforms.
It’s just getting started.
The State has abdicated its duty to the states. The civil war has already been started and the Federal Government is the one seceding.
Reminder: The current version of the GOP is a death cult.
“YOU DON’T HAVE TO GO HOME BUT YOU CAN’T PEE HERE!”
Department of Homeland Security agents were seen abandoning an attempt to arrest a man in Chicago over the weekend after being outnumbered by protesters.
In at least one case, the Chicago Police Department was ordered NOT TO ASSIST federal agents swarmed by demonstrators, according to reports.
In videos circulated on Instagram, two masked agents could be seen trying to take a man into custody in the middle of a busy street.
Drivers shouted at the federal agents and blew their horns as onlookers gathered. The struggle went on for several minutes before the agents released the man and fled in an unmarked vehicle.
Fox News correspondent Bill Melugin reported that Chicago officers were instructed not to respond to the U.S. Border Patrol’s calls for help in another incident where a vehicle was rammed and a person was shot.
Officers shot at armed woman in Chicago after cars ‘rammed’ officers, DHS official says
https://www.fox32chicago.com/news/chicago-feds-shooting-dhs
“Multiple law enforcement sources confirm to @FoxNews that Chicago police officers were instructed by their Chief of Patrol to NOT respond to Border Patrol agents call for help yesterday after they were reportedly surrounded by a large crowd of protesters following a ramming incident & shooting of an armed woman,” Melugin reported on X.
https://x.com/billmelugin_/status/1974902830575309239
On Sunday, DHS Secretary Kristi Noem told Fox News that Chicago was a “war zone” where her agents were not welcome to use restrooms.
Maybe she was inspired after watching, “One Battle After Another”.