Government shutdown could cut economic growth by half, Bessent warns

Minister of the Treasury Scott Besant The Federal Reserve warned on Sunday that the ongoing government shutdown is taking a toll on the U.S. economy, saying growth could fall by “as much as half” this quarter if the impasse persists.

“We’ve seen an impact on the economy since day one, but it’s getting worse,” Besant said during an interview with ABC’s “This Week.”

A government shutdown threatens crucial economic data, leaving the Fed — and households — in the dark

“We had a great economy under President Trump over the last two quarters, and now there are estimates that the economy and economic growth for this quarter could fall by as much as half if the shutdown continues,” Besant added.

The shutdown, which began on October 1, has forced hundreds of thousands of federal employees to remain without pay and delayed releases of key economic data, making it difficult for policymakers and businesses to gauge the health of the economy.

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once rare, Government closures These policies have become increasingly popular in recent decades, as political brinkmanship has become a hallmark of budget negotiations.

Since 1976, the US government has experienced 20 shutdowns. The most recent shutdown occurred when there was a dispute over the president’s funding Donald Trump The border wall brought government operations to a halt for 34 days, spanning from December 2018 to January 2019.

As the current shutdown extends far beyond that record, its effects are being felt nationwide, from delays in funding for the Supplemental Nutrition Assistance Program (SNAP) to mounting pressure on the nation’s air travel system ahead of the busy Thanksgiving holiday.

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Pisant warned that the increasing pressure on key sectors shows how the lockdown is beginning to affect Americans in their daily lives.

Transport Minister Sean Duffy warned on November 5 that flight reductions were inevitable as the lockdown had strained air traffic control operations. (Brendan Smalowski/AFP/Getty Images/Getty Images)

“There is, of course, the human cost,” Besant said. “We will have our busiest travel day of the year right after Thanksgiving, and Americans should look forward to five Democratic senators coming across the aisle.”

He added that consumers may also face product shortages as shipments of goods slow due to the lockdown.