Capital Markets can do really weird things at times … Mostly because they are accounting for items unknown at the time of which frequently do not occur!
Shutdown Update
As mentioned here and again here, this more full type of Government Shutdown takes an estimated .04% per day away from Economic Growth/GDP …
Given the length of the shutdown, 20+ days… A very rational response to slower Economy/Economic Growth would be lower interest rates….ESPECIALLY on the shorter end of the yield curve, but if sustained the longer end would also be expected to see lower rates …far right of chart below…. A Rational move!
Three Year Chart/10,000 Foot Level
Short term Lower rates would be a predictor of future FOMC – Federal Open Market Committee short end of the curve adjustment expectations ….
Long term rates would be an estimate of longer term future growth expectations – BUT this gives breath into many different types of financing ie. Mortgages, Lines of Credit
If Markets stay rational, a Government re-opening would push rates upward, eventually!
Time will tell, but we can see what is happening right now!
Have a Great “Rational Markets” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: AI created the cartoon shutdown picture. All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
