This podcast episode discusses the potential market impacts of a U.S. government shutdown. While a short-term shutdown may not have a significant impact, a prolonged shutdown could lead to a slowdown in economic growth and a shift in the performance of bonds relative to stocks. However, it's important to distinguish between a government shutdown and failing to raise the debt ceiling, as the latter creates a risk of mispayments on treasuries. The speakers also discuss the political polarization in the US and its implications for investors, particularly in light of the upcoming US election. They note that unless one party gains control of both Congress and the White House, there is unlikely to be any significant domestic policy changes that directly impact investors.
