Key Takeaways
- Republicans have rejected the latest Democratic proposal to end the ongoing US government shutdown, which included a clean continuing resolution and a one-year extension of Affordable Care Act (ACA) tax credits, signaling continued legislative deadlock.
- Federal Reserve Governor Miran suggested that widespread adoption of stablecoins could lead to lower neutral interest rates and potentially increase the risk of hitting the zero lower bound, while also bolstering the dollar's global standing.
- US consumer credit saw a significant jump in September, rising by $13.09 billion, substantially exceeding analyst expectations and the previous month's modest increase, indicating robust consumer borrowing.
- The French Finance Ministry has permitted fast-fashion retailer Shein to operate under state surveillance after the company removed illegal products, though judicial investigations are ongoing.
Republicans have reportedly rejected a recent offer from Democrats aimed at resolving the current US government shutdown. The Democratic proposal included a clean continuing resolution (CR) to reopen the government with a bipartisan minibus spending package. Additionally, Democrats sought a one-year extension of existing Affordable Care Act (ACA) tax credits and the establishment of a bipartisan committee to continue long-term reform negotiations. This rejection comes as delays in travel and food aid begin to impact citizens, intensifying pressure on lawmakers. The USDA has also stated it is working to comply with a judge’s order to pay full SNAP benefits.
Federal Reserve Governor Miran delivered a speech today on stablecoins and their implications for monetary policy. Miran indicated that widespread usage of stablecoins could likely lower the neutral interest rate. He also warned that such widespread adoption might increase the risk of the economy hitting the zero lower bound. Conversely, Miran noted that the rise of stablecoins could drive even wider use of the dollar globally and potentially push up its value.
In economic news, US consumer credit surged in September, reporting an increase of $13.09 billion, significantly higher than the estimated $10.23 billion and the previous month's $363 million. This robust growth was reflected across both revolving credit, which rose by 2.0%, and nonrevolving credit, up by 2.9% in Q3, with September consumer credit increasing by 3.1% on a seasonally adjusted annual rate (SAAR).
Meanwhile, in France, the Finance Ministry has confirmed that Shein is permitted to continue operations, albeit under state surveillance. This decision follows the French government's announcement that Shein had withdrawn all illegal products from its platform. Despite being allowed to operate, all judicial investigations against the fast-fashion giant are continuing.
In international trade developments, Mexican President Sheinbaum announced that the trade deal between Mexico and the European Union is slated for renewal next year. This renewal is expected to solidify economic ties between Mexico and the EU.
On the market front, the Nasdaq 100 index pared some of its earlier losses, declining by 1% after having been down as much as 2.1% during the trading session.
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.