With Democrats seemingly unsatisfied with Republicans dropping border wall funding and adjusting on Obamacare-related items, it appears President Trump is calling Schumer' s and Pelosi' s bluff, proclaiming  " If there' s a shutdown, there' s a shutdown," adding that Democrats would be to blame  if the federal government was left unfunded.

Schumer today:

• *SCHUMER: TRUMP CONCESSIONS BRING SPENDING DEAL CLOSER TO FINISH
• *SCHUMER SAYS ' SOME STICKING POINTS' LEFT ON SPENDING BILL TALKS
• *SCHUMER SAYS REVISED GOP HEALTH CARE BILL ' WORSE' THAN INITIAL
• *SCHUMER SAYS ISSUE OF POISON PILL RIDERS STILL OUTSTANDING

Pelosi added:

• *HOUSE DEMOCRATIC LEADER PELOSI SAYS WALL FUNDING ONE ISSUE
• *PELOSI: UNCERTAINTY RE OBAMACARE COST-SHARING PAYMT ALSO ISSUE
• *PELOSI: TYING STOPGAP SPENDING TO HEALTH BILL WOULD BE STUPID

And so,  as Reuters reports,  President Donald Trump downplayed the severity of a potential government shutdown,  making it clear who will be to blame...

 

 

" We' ll see what happens. If there' s a shutdown, there' s a shutdown," Trump told Reuters in an interview, adding that Democrats would be to blame if the federal government was left unfunded.

 

Trump added that a  shutdown would be a " very negative thing" but that his administration was prepared  if it was necessary.

As part of the budget negotiations,  Democrats have called for financial support to prop up Puerto Rico' s Medicaid program  covering health insurance for the poor, but many Republicans are opposed to the idea. Trump also said it would be  unfair to offer a debt bailout to Puerto Rico, a U.S. territory, because it was unfair to people in U.S. states.

 

 

" I don' t think that' s fair to the people of Iowa, and I don' t think it' s fair to the people of Wisconsin and Ohio and North Carolina and Pennsylvania that we should be bailing out Puerto Rico for billions and billions of dollars,"   Trump said. " No I don' t think that' s fair."

Notably, while equity markets are whistling complecentlypast the graveyard, USA sovereign risk has surged back to its highest (relative to Germany) since Trump' s election as the threat of a government shutdown gets priced into a non-manipulated market...

 

Well that was fast:  literally seconds ago we posted JPM' s Q1 GDP forecast revision, saying " while we wait to see if the Atlanta Fed will cut its final Q1 GDP estimate ahead of tomorrow' s official print to 0% or negative." At precisely the same time as we hit the publish button, the Atlanta Fed came out with its revised forecast and it' s a doozy: after starting its Q1 GDP nowcast at 2.5%, rising as high as 3.4%, and plunging recently as low as 0.5%, the Atlanta Fed has " thrown in the towel" on the quarter in which the Fed hiked rates, and while not negative - or 0.0% - it was about as close as it could go without the Fed losing all credibility for having hiked in a contraction quarter.

From the Atlanta Fed:

 

 

Latest forecast: 0.2 percent &mdash April 27, 2017

 

The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.2 percent on April 27, down from 0.5 percent on April 18.

 

The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday' s annual retail trade revision by the U.S. Census Bureau. The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning' s advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau.

 

The forecast of real equipment investment growth increased from 5.5 percent to 6.6 percent after the durable manufacturing report and the incorporation of previously published data on light truck sales to businesses from the U.S. Bureau of Economic Analysis.

 

Some context:



Some more context: if the Atlanta Fed is right, and tomorrow the BEA confirms that GDP was around 0.2% , this will be the lowest GDP quarter in which the Fed has hiked rates since Q4 1980.