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Some thoughts on U.S. government shutdowns... πŸ›οΈ

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Some thoughts on U.S. government shutdowns... πŸ›οΈ

History says markets should be okay πŸ‘

Sam Ro, CFA
Sep 27, 2023
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Some thoughts on U.S. government shutdowns... πŸ›οΈ

www.tker.co
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Federal budget funding gaps, which lead to government shutdowns, happen. (Source: Callie Cox)

In my opinion, a U.S. government that’s not shut down is better than one that’s shut down.

It’s one thing to debate over deficits and legislation in an orderly way. It’s another to use hundreds of thousands of government employees (and the U.S.’s creditworthiness) as pawns to play politics in the process. This is dysfunction.

But here we are.

Disappointingly, a government shutdown would be far from unprecedented. The U.S. has experienced 21 such events in the past 50 years.

And it looks like we could soon have our 22nd. From Goldman Sachs economists on Tuesday:

A government shutdown this year has looked likely for several months, and we now think the odds have risen to 90%. The most likely scenario is a shutdown starting Oct. 1. While there is still a chance that Congress can reach a last-minute deal to extend funding past Sep. 30, there has been little progress made and there is little time left. In the seemingly unlikely event Congress passes a short-term extension, we would still expect a shutdown sometime later in Q4…

What could it mean for markets? πŸ“ˆ

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