This article first appeared on GuruFocus.
The U.S. government shutdown has stretched into its second day, and Treasury Secretary Scott Bessent is warning the standoff could start to weigh on growth if it drags on.
In an interview on CNBC’s Squawk Box, Bessent said the political gridlock risks hitting both GDP and working America. Democrats are holding out for extensions on Affordable Care Act subsidies and a rollback of Medicaid cuts, while Republicans are standing firm on their sweeping tax-and-spending package, which they’ve dubbed the One Big, Beautiful Bill.
This isn’t the way to have a discussion, shutting down the government and lowering the GDP, Bessent said. We could see a hit to the GDP, a hit to growth, and a hit to working America.
He also gave an update on the search for a new Federal Reserve chair to replace Jerome Powell. The first round of interviews with 11 candidates should wrap up by next week, before recommendations are handed to President Trump.
For investors, the shutdown fight and Fed succession will be two of the biggest storylines to watch heading into October.