Washington is back in the headlines. If Congress can’t agree on a budget, the federal government could shut down, something that’s become almost routine. And it comes on top of a year where shifting policies on trade, taxes, and immigration have already kept markets guessing.

And naturally, the question comes up: What does this mean for the markets… and for my portfolio?

Shutdowns happen more often than you think

Every year, Congress is supposed to pass a budget before October 1, the start of the fiscal year. The reality? That rarely happens.

Instead, lawmakers scramble at the last minute, sometimes relying on “continuing resolutions” that temporarily fund the government while bigger fights play out. When they can’t agree, we get a shutdown.

It’s happened many times before:

• Clinton’s 21-day shutdown in 1995
• Obama’s 16-day shutdown in 2013
• Trump’s 35-day shutdown in 2018–2019, the longest on record

Despite the headlines, markets largely looked past all of them.

Why markets don’t panic

For investors, shutdowns have been short-term disruptions, not long-term risks.

Yes, federal workers may be furloughed (though they typically receive back pay once the shutdown ends). Yes, some government services get delayed. Even key reports, like the jobs numbers or inflation data, may be postponed.

But none of that changes the underlying drivers of markets:

• Economic growth
• Corporate earnings
• Consumer demand

That’s why, historically, shutdowns haven’t derailed investors.

What makes this one different

This time around, debates are focused on healthcare spending. And what’s unusual is the administration’s request for agencies to prepare permanent workforce reduction plans, not just temporary furloughs.

That’s new. And while the long-term impact isn’t clear, it’s a reminder that these fights often reflect deeper disagreements about government spending, debt, and fiscal responsibility.

With federal debt now around 120% of GDP, most agree discipline is needed—but the “how” is where politics gets messy.

Debt ceiling vs. shutdowns

It’s easy to lump shutdowns in with the debt ceiling. But they’re different.

A shutdown happens when Congress doesn’t approve new spending.
The debt ceiling becomes an issue when Congress has already approved spending, but the Treasury isn’t authorized to borrow enough to cover it.

In past years, debt ceiling battles have worried investors more than shutdowns, because failure to raise it could risk default. Thankfully, earlier this year Congress raised the limit by $5 trillion, giving breathing room for now.

The bottom line

Shutdowns dominate headlines. They disrupt families and government services. But for investors, history tells a clear story: markets move on.

So while Washington debates, remember this: your financial plan isn’t built on the latest political fight. It’s built for the long term.

Staying focused, disciplined, and aligned with your goals will always matter more than the drama on Capitol Hill.

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​Keeping wealth in focus,

The MY Wealth Management Team