On “The Big Money Show,” panelists delve into the potential government shutdowns in Washington, the implications of Obamacare grants, and the declining trust voters have in political entities over genuine solutions.
Partial shutdowns of the federal government could commence late Tuesday night, impacting businesses that restrict Congress from initiating lawsuits over spending bills. I mean, historically, the economic impact of these shutdowns hasn’t been profound.
The current funding lasts until 11:59 PM Eastern on Tuesday, marking a deadline before the start of the 2026 fiscal year on Wednesday, when closures could potentially begin.
Government shutdowns have been frequent occurrences since 1995, the first instance occurring when Republicans reclaimed control of Congress after a long absence. Typically, these events arise from disputes between lawmakers and the White House regarding spending and taxation. During a shutdown, essential workers remain on the job but don’t receive pay until funding resumes.
“Historically, the economic ramifications of such shutdowns have been limited, though fluctuations in the market could arise in the upcoming days,” noted Doug Beath, a global equity strategist at Wells Fargo Investment Institute.
Airlines caution that shutdowns could cause flight disruptions and impact air system stocks
While past shutdowns typically haven’t significantly affected the economy, their impact can vary based on duration and scale. (Kevin Carter/Getty Images/Getty Images)
“The shutdown will halt the publication of government data, which the Federal Reserve tracks to consider interest rate adjustments. There are some private sector job reports and inflation data from manufacturers, but these may not provide a complete picture.”
Federal Reserve System Bank of Chicago President Austan Goolsbee shared insights during a discussion that emphasized the Fed’s role during government shutdowns, stating that the level of economic fallout hinges on both the time frame and extent of the funding lapse.
“In the past, a thorough shutdown that didn’t extend for a long period appeared to exert little influence on the overall economy,” he remarked.
Partisan disputes risk critical economic data, leaving the Fed and the public in limbo
Senate Democrats, led by Minority Leader Chuck Schumer, oppose Republicans’ attempts to block funding bills as the threat of shutdown looms. (Photographer: Stefani Reynolds / Bloomberg via Getty Images / Getty Images)
“The consequences depend on the duration and breadth of this situation. If there’s any particular reason this shutdown is distinct from previous ones, then it warrants attention. But for now, it seems like a starting point,” he added.
According to Goldman Sachs analysts, most government shutdowns tend to be brief. The longest recorded one lasted 35 days in 2018, primarily affecting 15% of the federal activity while 85% continued functioning due to funding.
Goldman Sachs noted that each week of a shutdown typically dampens fourth-quarter economic growth by roughly 0.15 percentage points of GDP, although the impact could be reversed if operations resume before the close of the first quarter.
They also suggested that the shutdown might trigger a slight rise in Unemployment rate, but the effect is likely minimal as temporary layoffs get recorded as unemployed.
House Democrats’ government funding initiative collapses mere hours before the shutdown deadline
The Capitol in Washington at sunset on June 22, 2025. (Kevin Carter/Getty Images/Getty Images)
The report indicates there’s no clear trend regarding how stocks, interest rates, and the U.S. dollar react to shutdowns, as previous instances reflected complex effects on financial markets. It’s interesting, because while Treasury yields often dip, the dollar usually weakens.
A 2014 Office of Management and Budget report highlighted various economic disruptions associated with shutdowns.
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Some of these included halting permissions, reviews, and licenses (like for energy projects), the suspension of IRS income checks for banks assessing borrowers, and numerous small business loans put on hold. Furthermore, tourism and travel often suffer due to national park closures.
