Shutdown Hits US Economy Hard, Treasury Chief Warns of Worsening Impact

Washington: As the historic US government shutdown drags into record territory, Treasury Secretary Scott Bessent has warned that its economic fallout is widening, threatening growth and shaking business confidence across the country.

Bessent said the impact of the shutdown is worsening “day by day,” with prolonged disruptions beginning to hit key sectors, delay public spending, and strain federal finances. “We had a fantastic economy under President Trump over the past two quarters, but if this shutdown continues, growth this quarter could be cut by as much as half,” he cautioned.

Economists have echoed his concerns, warning that the stalemate is undermining consumer sentiment, delaying federal payments, and disrupting essential services — from air travel and food assistance to regulatory operations. Business groups have also flagged the growing risk to supply chains and investor confidence.

The shutdown has already cut off billions in SBA capital and contracting opportunities – forcing small businesses to lose revenue, lay off workers, and abandon expansion plans.

The longer the government remains closed, the more Main Street suffers. pic.twitter.com/7BcU0lqSvT

— Kelly Loeffler (@SBA_Kelly) October 9, 2025

Taking a veiled swipe at the previous administration, Bessent said, “We’re not going to repeat what happened under the Biden administration, where inflation soared to the highest levels in decades while the public was told everything was fine.” He added that inflation in the “basket of goods and services for working Americans” had effectively risen more than 30 percent during that period.

With negotiations in Congress showing little progress, analysts warn that each passing week of the shutdown could further erode economic stability and push the US closer to a potential fiscal shock.

updated