Will a government shutdown impact the stock market? Experts weigh in
A showdown to stop runaway government spending could actually be an encouraging sign to investors, one expert says
Capitalist Pig hedge fund manager Jonathan Hoenig reacts to the market selloff after the Fed projected fewer rate cuts in 2025 on ‘The Big Money Show.’
House GOP leaders are scrambling to reach a deal to avert a partial government shutdown before Friday's deadline, but experts say a shutdown would likely have little impact on the stock market — and might even help it, given the circumstances.
The last-minute wrangling comes after the initial bipartisan deal received an avalanche of criticism from conservatives amid a push from the incoming Trump administration to rein in government spending.
Stocks bounced Thursday afternoon as investors weighed a hawkish Fed view and a potential government shutdown. (Brendan McDermid / Reuters Photos)
Investor and finance expert Eric Schiffer, chairman of The Patriarch Organization, says, "A government shutdown won't lead to nuclear meltdown in markets, but it will create short-term volatility — but only for a few trading sessions since investors believe President Trump will use his mandate to get it passed."
Ted Jenkin, co-founder of oXYGen Financial, dismissed concerns that a shutdown could have any major impact on the markets, telling FOX Business, "If there is any positive light about the increasing fiscal dysfunction on Capitol Hill, it’s that we have enough history to show that a government shutdown has minimal impact on investors or the financial markets."
HERE'S WHAT'S IN THE SPENDING BILL THAT'S DRAWING THE IRE OF ELON MUSK, VIVEK RAMASWAMY
Chris Markowski, founder of Markowski Investments, said in an interview that markets could be impacted by a shutdown, depending on how long it lasts. But overall, shutdown concerns are often overblown.
Fox News chief congressional correspondent Chad Pergram reports on the latest news emerging from Congress as lawmakers work to avoid a government shutdown.
"I think that what's taken place for the past couple days is kind of extraordinary in the sense that so many people were flooding the phone banks over in D.C. to basically say that enough is enough," Markowski told FOX Business. "We didn't vote for this. We need to stop with all of this ridiculous spending."
Markowski said shutdown scares happen right around Christmastime every year, and he argues that any other year, lawmakers would have already been home for the holidays by now. But this year, "You actually have the taxpayers pushing back."
Markowski believes that investors might be encouraged by a shutdown over the prospect that the government could finally be cutting spending, which would ultimately lead to stronger markets.
Republicans in the GOP-led House are working to make a last-minute deal to avert a government shutdown after bipartisan legislation was scrapped following pushback from conservatives over the spending bill. (Julia Nikhinson/Bloomberg via / Getty Images)
He pointed to the fact that one of the largest line items in the federal budget is interest on the national debt, which now exceeds $36 trillion.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"You can't run a household like that. You can't run a business like that," he said, but, "That's how we're running our country at this point in time."
"I'm sick and tired, quite frankly, as most taxpayers are," Markowski said. "It's not so much about paying our taxes — which we have to do — it's the fact that they're just being wasted on a regular basis."