Reinhart Week in Review by Madison Investments 10.03.2025

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FEDERAL GOVERNMENT SHUTDOWN

Republicans were not able to reach agreement with Democrats to bring a continuing resolution to fund the government before the end of the fiscal year on September 30. As a result, the federal government shut down all non-essential services and furloughed workers providing them. The Trump administration is threatening to permanently fire many of these workers. Markets have thus far shrugged off the shutdown.

Our Take: There is no issue with the debt ceiling related to this shutdown, and many services are continuing.  In the near term, markets are not expecting a big impact. If the shutdown drags on and causes longer delays in payments, or if it results in a significant permanent decline in the federal workforce, then markets are likely to become more concerned about the economic impact.

 

EMPLOYMENT

This Friday is the normal monthly release date for the Bureau of Labor Statistics (BLS) data on job creation, wages and unemployment. Due to the federal government shutdown, this report was not released. Private employment reports were mixed with ADP showing a decline in September employment and a negative revision to the August number, while Challenger showed a decline in the level of layoffs from last September.

Our Take: The private employment surveys cannot fully replace the BLS data in giving the most complete picture of the labor market. The Fed is currently in a very data-dependent state from meeting to meeting and is unlikely to act without more complete data on both the labor market and inflation (also produced by the BLS).

 

MUNICIPALS

New York’s Metropolitan Transportation Authority (MTA) board voted this week to increase the base subway and bus fare by 10 cents to $3. Express bus fares will also increase. Some LIRR and Metro-North train fares will increase along with toll rates at certain bridges and tunnels. The increases are scheduled to take effect early next year.

Our Take: MTA officials indicated that the fare increase was necessary due to rising labor costs and inflation. The last subway and bus fare increase occurred in 2023 and historically fares have increased every two years.

About Reinhart Fixed Income
“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC (“MAM”), and Madison Investment Advisors, LLC (“MIA”). MAM and MIA are registered as investment advisers with the U.S. Securities and Exchange Commission. Madison Funds are distributed by MFD Distributor, LLC. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority. The home office for each firm listed above is 550 Science Drive, Madison, WI 53711. Madison’s toll-free number is 800-767-0300.

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