Northern Trust's Tannenbaum on US Shutdown

The video discusses the potential government shutdown in the US and its economic implications, including effects on consumption, growth, and deflation. It examines the impact of political dysfunction on US creditworthiness and the sustained foreign demand for US Treasuries. The discussion also covers the current state of American consumer confidence and spending, highlighting factors like interest rates and student loans. Finally, concerns about a potential US debt crisis are addressed, with insights into market conditions and economic activity.

What is the most likely outcome if a full budget is not passed by the end of Saturday night?

• A continuing resolution allowing departments to continue spending

• A complete government shutdown

• A decrease in government spending

• An increase in taxes

How might a government shutdown affect the Federal Reserve's decision-making?

• It could delay decisions on interest rates

• It would have no effect

• It would lead to an immediate increase in interest rates

• It would cause the Federal Reserve to shut down

What concerns do rating agencies have about the U.S. government?

• The strength of the U.S. dollar

• The high level of taxes

• The dysfunction and lack of budget discipline

• The inability to pay debts

What has been the trend in foreign demand for U.S. Treasuries?

• It has been unpredictable

• It has significantly decreased

• It has remained stable

• It has increased dramatically

What factor is not helping consumer confidence according to the transcript?

• High oil prices

• Low interest rates

• Increased wage gains

• Strong employment market

What is Ray Dalio's concern regarding the U.S. economy?

• A potential debt crisis

• A stock market crash

• A rapid increase in inflation

• A housing market collapse

What is the current state of household and corporate balance sheets in the U.S.?

• Unstable and unpredictable

• In very good condition

• In poor condition

• Rapidly deteriorating