Shut Down the Government, and This Time, Investors Will Care
Noting that during the past three shutdowns, the stock market was unfazed by the political gamesmanship,
Mr. Boltansky said, “I think this time will be worse because of the uncertainty from President Trump.”
Investors are grappling with two matters right now: the need to raise the nation’s debt ceiling in September so the government can pay its obligations,
and the desire to have a federal budget in place by Oct. 1 to avoid a shutdown.
Even Mr. Trump’s deregulatory agenda, which he has been pursuing administratively rather
than legislatively, could be harmed by a government closure, Mr. Boltansky said.
Although stocks rose on Friday, investors should not expect such a performance this time, Mr. Boltansky said.
“It will confirm one of the market’s fears that the Republicans are not a political party
but a government coalition made up of leadership loyalists, conservatives and moderates,” Mr. Boltansky said.
Mr. Boltansky looked back at the stock market’s performance during all 18 government shutdowns, starting in 1976.
“If we have to close down our government, we’re building that wall.”
So proclaimed President Trump at a rally in Arizona on Tuesday, raising the specter of a federal government
shutdown if Congress fails to provide the money to put up a wall between Mexico and the United States.
“We’re going to get the debt ceiling passed,” Mr. Mnuchin vowed at an event in Louisville, Ky., on Monday.
