Lately, headlines have been buzzing about the government shutdown and its potential impact on the economy and financial markets. Previous government shutdowns have had negligible effects on the broader economy and financial markets though delays in economic data releases (e.g., employment and inflation figures) occasionally heightened short-term volatility and uncertainty.
This lack of significant impact makes sense because the federal government is just one of the four broad economic cohorts: households, businesses, state and local governments, and the federal government. Notably, the federal government is actually the smallest contributor in percentage of GDP terms.
This post appeared first on ETF Trends.