As the deadline approaches, the U.S. government is set to face a shutdown at 12:01 AM unless a last-minute agreement is reached between Democrats and Republicans. If funding ceases, various government operations will be temporarily halted until Congress can reach a consensus to approve a budget to restore the affected services.
Pending home sales in the U.S. rose to their highest level in five months this August. “Decreasing mortgage rates are allowing more buyers to enter contracts,” stated Lawrence Yun, chief economist at the National Association of Realtors. “In the Midwest, lower mortgage costs alongside affordability are drawing more buyers compared to other areas.”
Choose any asset allocation, and you’ll find it has been successful in 2025. This year, a remarkable characteristic of global markets, as the third quarter comes to a close, is the broad-based growth seen across major asset classes, evidenced by a variety of ETFs as of Friday’s close (September 26).
Inflation in the U.S. has increased slightly in August according to the Personal Consumption Expenditures (PCE) price index. The overall index rose by 2.7% year-over-year, marking the highest level since April 2024. Core PCE prices, which exclude the more volatile food and energy sectors, also experienced a 2.9% annual increase, consistent with July’s results.
● Pay Up!: Conservative Myths About Tax Cuts for the Rich
John C. Campbell
Summary via publisher (Cambridge U. Press)
Since the Reagan era, conservative leaders in the U.S. have promoted tax cuts, particularly for wealthy individuals and corporations, as the most effective means to stimulate economic growth. In his insightful book, Pay Up!, John L. Campbell debunks these influential yet misguided claims. He presents historical and international evidence challenging every justification conservatives have proposed for tax cuts—including assertions that taxes are excessively high, that they hinder the economy, create government inefficiency, unfairly redistribute income, and undermine personal freedom. He further argues that nations can actually thrive under higher taxation, especially when such increases are levied primarily on those with the most capacity to pay.
Shifting portfolios toward non-U.S. bonds has proven to be a successful strategy for fixed-income investments in 2025. The Federal Reserve’s recent decision to lower interest rates may further enhance this positive trend for the remainder of the year.
U.S. jobless claims continued to decline last week, alleviating worries about potential weaknesses in the job market. First-time claims for the week ending September 20 were seasonally adjusted to 218,000, nearing the lowest level recorded this year.
The renowned investor Sir John Templeton famously cautioned: “The four most dangerous words in investing are: ‘This time it’s different.’” This warning resurfaces as the stock market continues to rise despite high valuations. The underlying argument is that artificial intelligence has fundamentally altered the investment landscape.
New home sales in the U.S. spiked in August. The number of signed contracts for new single-family homes surged to a seasonally adjusted annual rate of 800,000, reflecting a 21% increase from the prior month and a 15% rise compared to last year. However, Nancy Vanden Houten, a leading economist at Oxford Economics, cautioned that this increase “may overstate any genuine improvement in housing activity, as new home sales are prone to significant revisions. A more stable trend, similar to what has been observed throughout the year, is more likely.”
U.S. economic growth is expected to proceed at a steady pace in the third quarter, according to the median estimates from a range of nowcasts compiled by CapitalSpectator.com. This optimistic forecast follows the Federal Reserve’s recent decision to lower its target interest rate, aimed at alleviating concerns regarding a cooling labor market.
### Conclusion
As we observe developments in government operations, housing sales, and economic indicators, it is evident that various factors are shaping the landscape of the U.S. economy. The upcoming weeks will be crucial in determining the direction of fiscal policies and their impact on the market. Stay tuned for ongoing updates as these situations unfold.
