Monday - Friday, 6:00 - 7:00 PM ET
CNBC’s Jim Cramer on Monday told investors why he believes that a government shutdown won’t have a major effect on the market, looking back at how stocks have reacted to shutdowns in the past. He said his primary concern is that the shutdown will delay the release of key economic data that informs the Federal Reserve’s decision on interest rates.
“When it comes to government shutdowns, my message is simple: keep calm and carry on, because the stock market tends to do just fine in these situations,” Cramer said.
Prediction markets are pricing in about a 70% chance that the federal government will shut down on Wednesday as members of Congress fail to agree on a stopgap bill to keep operations fully funded past Tuesday. Democrats are standing firm on their demands to include measures in the bill that protect Obamacare health insurance subsidies, while Republicans insist that such a debate should be put on hold until after a shutdown is avoided.
Cramer conceded that the idea of a shutdown seems unnerving, noting that this would effectively be the first full government shutdown since 2013. But he pointed out that the market has actually seen gains following two of the last three full shutdowns and suggested there isn’t a discernible trend of how stocks behave when the government halts operations, citing research from analysts at Bank of America
