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ACG Insights: Navigating a US Government Shutdown

October 2, 2025 ACG Insights

(Download the full report HERE)

Executive Summary

  • A US government shutdown occurs when Congress fails to pass, or the president refuses to sign, a spending bill to fund the federal government’s operations. This results in a funding gap that can cause several government functions to be temporarily disrupted.
  • Since the current budget process was established in 1976, the US government has had 21 funding gaps, resulting in 11 shutdowns for various lengths of time.
  • Historically, market reaction by stocks and bonds to these events is typically subdued.

Introduction

As of 12:01 A.M. Wednesday, October 1st, funding for the US government ceased as Republicans and Democrats failed to reach an agreement regarding a spending bill. While budget confrontations are actually quite common, the political climate in Washington is historically tense, with both political stalemate and economic uncertainty looming. Drawing from history, the real impacts may depend less on the headlines and more on the shutdown’s duration, scope, and the economy’s present vulnerabilities.

Download the full report HERE where we discuss:

  • Understanding the Shutdown Mechanism
  • Historical Context and Potential Impacts
  • Financial Markets Reaction

Sources

  1. Bloomberg. Agency plans. Status of visitor centers based on previous shutdown guidance.
  2. U.S. House of Representatives
  3. Truist, FactSet, Bloomberg, U.S. House of Representatives
  4. S&P, Fitch, Moody’s
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The information contained herein reflects the opinions and projections of the ACG as of the date of publication, which are subject to change without notice at any time subsequent to the date of issue. All information provided is for informational purposes only and should not be deemed as investment advice or a recommendation to purchase or sell any specific security. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any data presented. You should not treat these materials as advice in relation to legal, taxation, or investment matters.
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