Prof G Markets The Economic Fallout of a Government Shutdown & Why Fermi Will Be the Worst IPO of 2025
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Oct 1, 2025 
In this discussion, Stephanie Roth, Chief Economist at Wolfe Research, highlights the economic implications of a possible U.S. government shutdown. She estimates a 0.4% GDP hit from the last shutdown and anticipates a similar duration this time. The conversation also touches on potential mass layoffs, which could drastically impact the labor market. Shifting gears, they delve into Fermi America, a company facing scrutiny as it prepares for what might be the worst IPO of 2025, raising questions about its revenue claims and viability.
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Private Data Will Fill Short Government Gaps
- A temporary blackout of government data will shift attention to private indicators like PMIs and ADP.
- Two weeks without official data won't drastically alter forecasters' views, but a longer gap would raise concern.
Data Gaps Could Nudge Fed Toward A Cut
- Missing data increases uncertainty and modestly raises the odds the Fed will cut at the next meeting.
- Roth says the shutdown could nudge policymakers toward an October cut but they'd prefer to see more data.
Layoffs Would Create Meaningful Labor Slack
- Mass federal layoffs would matter more than furloughs and could add significant slack to labor markets.
- Roth notes a 100k RIF is meaningful, but firing 400k non-essential workers would move unemployment by a couple tenths.