The intense partisan politics that drove Washington into a shutdown are making the path out of it hard to see.

It’s a stare-down, and one side has to blink — with Republicans and Democrats each vowing it won’t be them.

Democrats have shot down a GOP-crafted stopgap to fund the government at current levels through Nov. 21, demanding an extension of enhanced Affordable Care Act (ACA) subsidies and new restrictions on the administration’s practice of withholding federal funds.

The impetus to find a solution is on Republicans who have the White House and both majorities, they argue. (The Hill – Continue Reading)

Traders in prediction markets are betting that the U.S. government shutdown could drag on for nearly two weeks, with odds rising that Congress will not reach a deal until at least mid-October.

On Kalshi, a federally regulated prediction market, the current forecast implies the stoppage will last 11.1 days, up sharply in recent days as negotiations on Capitol Hill have stalled.

On Polymarket, traders see the highest likelihood that the government won’t reopen until Oct. 15 or later, with that outcome carrying about a 38% probability. By comparison, odds of a resolution in the Oct. 6-9 window stand at 23%, while Oct. 10-14 carries 22%. Only 14% of traders expect lawmakers to strike a deal in the coming days, between October 3–5. (CNBC – Continue Reading)

The U.S. government shutdown does not have near-term implications for the ‘AA+’/Stable U.S. sovereign rating but highlights long-standing policymaking weaknesses and political brinkmanship around budgetary issues, Fitch Ratings says. The shutdown began on Oct. 1 after Congress failed to either agree on the 12 appropriations bills required to fund discretionary federal programs or enact a continuing resolution (CR) to maintain funding at prior levels.

A shutdown can see affected federal agencies halt operations and be obliged to furlough employees (with some exceptions), although employees are entitled to payment for this period once the relevant appropriations are passed. Congress last met the Sept. 30 deadline to pass all 12 bills by the start of the new fiscal year in 1996, and the most recent shutdown was in 2018-2019. Regular reliance on CRs to keep government operations running demonstrates the continued weaknesses in fiscal policymaking since we downgraded the U.S. from ‘AAA’ in 2023. (Fitch – Continue Reading)