Key Takeaways
- U.S. House Speaker Mike Johnson confirmed Donald Trump's support for backpay to furloughed federal employees, as the government shutdown enters its seventh day, with Johnson warning of significant GDP impact and mounting air traffic delays.
- The European Commission has recommended a 50% out-of-quota duty on imported steel, effectively doubling customs duties from 25% to 50% and halving import quotas, in a strategic move to safeguard European steel jobs and drive reindustrialization.
- Canada's Ivey Purchasing Managers' Index (PMI) surged to 59.8 in September from 50.1 in August, indicating a robust expansion in Canadian economic activity that surpassed forecasts.
- Federal Reserve Vice Chair for Supervision Michelle Bowman delivered remarks at a community banking event but did not discuss monetary policy or the broader economy, offering no new insights on interest rates or inflation.
- Bayer AG (BAYN) announced a partnership with Cornfed Farms for its first Midwest ForwardFarm Initiative, focusing on advancing regenerative agriculture practices.
The political and economic landscape is currently marked by a protracted U.S. government shutdown and a significant shift towards protectionist trade policies in Europe, while North American economic data presents a mixed picture.
U.S. Government Shutdown Enters Day 7
The U.S. government shutdown has now stretched into its seventh day, with House Speaker Mike Johnson reiterating that former President Donald Trump supports providing backpay to furloughed federal employees. This comes amidst growing concerns over the shutdown's economic repercussions, with Johnson stating it is "bad for the economy" and will impact GDP. He also noted that air traffic delays are beginning to mount, affecting travel across the country.
Despite the consensus on backpay, Speaker Johnson acknowledged that "some legal analysts" do not believe in shutdown backpay, a stance he has not yet personally examined. Johnson emphasized the Republican Party's "100% united" front and urged Senate Democrats "to do the right thing" to end the impasse. The ongoing standoff has led to a "stalemate" as both parties trade blame, with the White House reportedly weighing "thousands" of federal worker layoffs.
Europe Moves to Protect Steel Industry with Higher Tariffs
In a significant policy shift, the European Commission has recommended a substantial increase in protectionist measures for its steel industry. EU Commissioner Stéphane Séjourné announced a proposal for a 50% out-of-quota duty on imported steel, effectively doubling the existing customs duties from 25% to 50%. This new "safeguard clause on steel" also involves reducing the quota of steel imported from abroad by half.
The move is explicitly aimed at "saving European steel plants and jobs" and fostering the "reindustrialization of Europe." This aggressive stance aligns the EU's tariffs with those previously imposed by the U.S. and Canada, reflecting a global trend towards safeguarding domestic industries against overcapacity, particularly from China.
Canada's Ivey PMI Shows Strong September Expansion
On the economic data front, Canada's Ivey Purchasing Managers' Index (PMI) for September registered a robust 59.8, a significant jump from August's 50.1. This figure comfortably exceeded the forecast of 51.2, indicating a strong expansion in Canadian economic activity. The seasonally adjusted index marks its highest level since June 2024, reflecting broad-based growth as indicated by purchasing managers across the public and private sectors.
Fed's Bowman Avoids Monetary Policy Discussion
Federal Reserve Vice Chair for Supervision Michelle Bowman delivered welcoming remarks at the 2025 Community Banking Research Conference hosted by the Federal Reserve Bank of St. Louis. Notably, Bowman did not discuss monetary policy or the broader economy during her address. This absence of commentary on interest rates, inflation, or the economic outlook leaves market participants without new signals from the central bank regarding future policy direction.
Bayer AG Expands Regenerative Agriculture Initiative
In corporate news, Bayer AG (BAYN) has partnered with Cornfed Farms to establish the first Midwest ForwardFarm Initiative in the United States. This collaboration is part of Bayer's global ForwardFarming program, which focuses on advancing regenerative agriculture practices to ensure economic success for farmers while promoting environmental stewardship. The initiative aims to share knowledge and demonstrate sustainable farming techniques in the region.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.