US FISCAL: CBO: October Deficit Shrinks, Shutdown/Timing Issues Muddy Comparison
The Congressional Budget Office estimates that the federal government posted a $219B deficit in October, vs just over $258B a year earlier. This would still be one of the bigger October deficit in recent years but regarding that $39B Y/Y decrease: revenues were up $75B vs a year earlier, "driven by larger collections of individual income and payroll taxes and by increased customs duties", and while outlays were up $37B that was due to a timing shift without which outlays would have decreased (not increased) by $70B vs Oct 2024.
- Overall accounting for timing changes in this first month of the fiscal year, "the decrease in the deficit for October also would have been larger— $145 billion rather than $39 billion. CBO estimates that outlays were smaller than a year ago in part because of the lapse in discretionary appropriations that began on October 1, 2025."
- As such the imminent reopening of the government will probably mean that outlays ramp up shortly to make up for lost ground.
- We should also note that CBO - whose estimates are usually quite accurate - undershot the actual September surplus by $34B, which it attributes to the lack of full data in shutdown: "Because data were not available from many agencies during the lapse in funding, CBO’s estimate of September spending did not account for certain transactions with the Treasury, a number of which were recorded as offsetting receipts."
- Treasury is due to publish its October estimates on Thursday but it's unclear whether it will produce a report even if the shutdown is resolved by then.
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
