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U.S. Government Shutdown: If It Happens, Economic Bad News Could Be Good News for Stocks

By September 29, 2025Uncategorized

 

TradingKey – If the U.S. government experiences a shutdown, it could lead the Federal Reserve to stick with its current pace of interest rate cuts, or even accelerate them if the shutdown lasts longer and causes deeper economic disruptions. With a U.S. recession highly unlikely, these rate cuts are seen as preventive, a type that historically has driven U.S. stock market gains. Thus, supported by easing monetary policy, economic challenges stemming from a shutdown are likely to translate into positive outcomes for stocks, turning bad news for the economy into good news for the market.

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