The Horizon Advisor Network Investylitics Committee members met on the afternoon of Monday, November 10th. We were happy to have the opportunity to review the research from the various market strategists and economists that the committee follows. Since our meeting last month, the government shutdown has continued. It is now approaching 43 days, which makes it the longest government shutdown on record. However, on Sunday night, 8 Democrats joined 52 Republicans in the Senate passing a procedural vote that would allow for a full vote to reopen the government on Monday evening. Since the legislation proposed in the Senate is different than the one previously passed by the House, it will have to go back to the House of Representatives for an additional vote before being signed by President Trump.
The agreement, passed in the Senate with a 60-40 vote, is expected to be signed by President Trump if it passes the House. It funds most government operations through January 30, 2026, via a continuing resolution (CR) at current spending levels, giving lawmakers more time to work on full-year appropriations bills. It would allow government employees, including air traffic controllers and TSA checkpoint employees at airports to be paid. It provides full-year funding through September 30, 2026, for the Departments of Agriculture (including SNAP and WIC), Military Construction-Veterans Affairs, and the Legislative Branch.
The continued government shutdown means that there have been no government economic reports or statistics released except for the September CPI inflation report which was released late in the month. The lack of government reporting has left the Federal Reserve Bank, economists, and market strategists to rely on other private reports for evidence about inflation, unemployment, and the pace of economic growth. Fed Chairman Jay Powell has said that it is like driving in a thick fog. This means that the Fed may have to slow down its interest rate and policy decisions until there is more data available which would allow them to navigate the economic backdrop with more confidence.
The government called workers back to the Bureau of Labor Statistics so they could create the report which was needed to calculate the 2026 cost of living adjustment for Social Security, which clocked in at 2.8%. The September CPI report showed a 3.0% increase over the past 12 months and a 0.3% rise in the month-over-month figure, indicating that inflation is still present but slightly cooler than expected. The index for all items less food and energy (core CPI) increased 0.2% for the month and was also up 3.0% over the year. Shelter costs, which make up a large portion of the inflation calculation, showed a more moderate year-over-year gain.
Continued moderation in rents and housing costs, along with lower oil and gas prices, could allow inflation measures to slowly decline, despite tariff uncertainty. This could allow the Fed to continue modest interest rate reductions over the next 6 to 12 months. As you can see in our first chart below, The Apartment List National Rent Index has declined for over 2 years, easing the shelter component of CPI. Shelter inflation is now near pre-pandemic levels.
