US: OMB Director Vought Suggests That Mass Government Layoffs Have Begun

Oct-10 16:47

White House Office of Management and Budget Director Russell Vought writes on X, "The RIFs have begun." The message, which provides no additional details, appears a reference to the 'reduction-in-force' threat Vought issued ahead of the shutdown, promising mass layoffs at federal government agencies. 

  • Vought wrote in a memo on September 24, a week before the government shutdown, that federal agencies should prepare reduction-in-force plans for mass firings targeting employees who work for non-legally-mandated programs.
  • "In the memo, OMB told agencies to identify programs, projects and activities where discretionary funding will lapse Oct. 1 and no alternative funding source is available. For those areas, OMB directed agencies to begin drafting RIF plans that would go beyond standard furloughs, permanently eliminating jobs in programs not consistent with President Donald Trump’s priorities in the event of a shutdown," per Politico.
  • If the OMB follows through on its threat, it would break from regular shutdown procedure, where federal workers have been furloughed and reimbursed with backpay when the government is reopened. So far, the Trump administration has refrained from hardline action but with Democrats dug in for a lengthy shutdown, the White House appears set for sweeping cuts. This strategy is also likely to include additional recissions packages, as noted in earlier bullet.
  • Trump said at a Cabinet meeting yesterday, “We’re only cutting Democrat programmes, I hate to tell you, but we are cutting Democrat programmes."
  • Andrew Desiderio at Punchbowl notes on X that Senate Majority Leader John Thune (R-SD) just said the White House “to their credit” has held off on some of the more drastic measures, but added: “They're going to start making some decisions as about how to move money around, which agencies and departments are going to be impacted.” 

Historical bullets

US TSYS/SUPPLY: WI 10Y Re-Open

Sep-10 16:47

WI 10Y steady at 4.047% heading into the $39B 10Y note auction re-open (91282CNT4) cut-off at 1300ET, compares to last month's tail: drawing 4.255% high yield vs. 4.245% WI.

FED: US TSY 9Y-11M AUCTION: NON-COMP BIDS $119 MLN FROM $39.000 BLN TOTAL

Sep-10 16:45
  • US TSY 9Y-11M AUCTION: NON-COMP BIDS $119 MLN FROM $39.000 BLN TOTAL

US OUTLOOK/OPINION: Nomura Nudge Headline CPI Estimate Higher After PPI

Sep-10 16:43
  • Giving a sense of the scope for potential revisions to analyst estimates for both CPI and PCE, we note a minor upward tweak in Nomura’s headline CPI estimate but no change in core CPI ahead of tomorrow’s release.
  • Nomura now see headline CPI at 0.37% M/M instead of 0.34 on stronger than expected PPI residential electricity prices whilst their core CPI estimate is unchanged at 0.336% M/M.
  • Their core PCE tracking has been revised just 1bp higher to 0.35% M/M.
  • A reminder that both their core CPI and core PCE estimates were marginally higher than our take on the analyst median, which stood at 0.32% M/M for core CPI and 0.31% M/M for core PCE in our CPI preview published yesterday.