Lawmakers are scrambling to avoid a government shutdown days before Christmas, due to President-elect Donald Trump’s rejection of a funding bill. The last shutdown in 2019 cost the U.S. economy $3 billion and no shutdown has occurred since. Air travelers could face delays if TSA employees choose to stay home without pay, leading to longer airport lines during the busy holiday travel season. However, mail and Social Security checks would continue flowing smoothly regardless of a shutdown. The U.S. Postal Service, funded independently, would not be impacted and Social Security benefits are considered mandatory and not reliant on short-term funding. Stock markets would be affected on a day-to-day basis if a shutdown occurs, on the heels of a recent Dow Jones Industrial Average decline. Historically, government shutdowns have had little lasting impact on equity performance, with stocks generally being positive in most cases three to six months later. The combined impact of a government shutdown and a slower pace of interest rate cuts by the Federal Reserve could further influence the sensitive market. While shutdowns may lead to short-term emotional reactions on Wall Street, the long-term impact is often limited.
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The potential impact of a government shutdown on consumers: from travel to stock markets
