The next few weeks could see “further weakness” in share markets as fearful investors anticipate the worst, he said.
But the odds “strongly favour” a solution being found and a debt default being avoided, he said – particularly given that US government shutdowns are “far from new”.
There were 17 government shutdowns in the US between 1976 and 1996, said Mr Oliver, with the median shutdown lasting four days and having a negligible impact on the US economy.
But the more pressing issue is the debt ceiling, which is expected to be reached on 17 October.
Looking to history again, Mr Oliver pointed out the debt ceiling has been increased 17 times since 1993 – most recently in August 2011 when it was increased at the last minute.
In addition, both sides of US politics are aware of the consequences of the United States defaulting on its debt, he said.
House speaker John Boehner has stated he “won’t allow this to happen”, and President Obama is unlikely to want his legacy marred by letting the United States default “while on his watch”, said Mr Oliver.
And even if the worst came to the worst, the USA and the world in general is in a “far better position to withstand a debt ceiling crisis than it was the last time around in August 2011”, said Mr Oliver.
The US budget deficit is smaller this time around; the Federal Reserve’s monetary policy is far more stimulatory; and global growth is picking up, said Mr Oliver.
“A last-minute deal is likely to set the scene for a resumption of the bull market and the usual solid seasonal gains into year end,” he said.
“Bonds are likely to benefit from safe haven buying in the short term, but are likely to resume their gradual rising trend once a solution is in place.”
