Federal Workers and Economy Bear Brunt of Prolonged Shutdown Deadlock

The U.S. government shutdown, now in its eighth day as of Oct. 8, 2025, has sparked intense speculation in prediction markets about its duration. Traders on platforms like Polymarket and Kalshi indicate a growing consensus that the impasse between Congress and the Trump administration over healthcare funding will prolong the shutdown beyond mid-October. According to Polymarket data as of Oct. 8, 76% of participants expect the shutdown to extend past Oct. 15, with 23% predicting an end between Oct. 10-14 and less than 1% anticipating resolution by Oct. 6-9 DelawareOnline^[1]. Kalshi, a federally regulated market, forecasts an average shutdown duration of 11.1 days, with 38% odds of reopening on or after Oct. 15 CNBC^[3].

The current deadlock stems from a failed Republican proposal to fund the government at existing levels through Nov. 21, which Democrats blocked. This marks the 11th government shutdown since 1980, with historical precedents including the 35-day 2018-2019 shutdown over border wall funding and the 21-day 1995-1996 shutdown tied to spending cuts DelawareOnline^[1]. Prediction markets suggest this episode could rank among the most significant, though not the longest, in modern history.

Economic implications are mounting. The shutdown has suspended critical data releases, including the October jobs report and CPI figures, complicating the Federal Reserve's policy decisions. J.P. Morgan analysts note that each week of shutdown subtracts approximately 0.1% from annualized GDP growth . Morgan Stanley highlights the added risk of permanent federal job cuts, which could exacerbate labor market fragility . Meanwhile, global markets have reacted cautiously, with gold prices surging and the U.S. dollar index declining, reflecting a "risk-off" sentiment .

The political calculus remains fluid. Senate Majority Leader John Thune and Minority Leader Chuck Schumer are set to meet after a failed vote on Oct. 8, but no immediate resolution is expected. The White House has signaled willingness to consider fixes for expiring ACA tax breaks but insists on a stopgap bill without broader healthcare changes USA Today^[6]. With 750,000 federal workers furloughed or working unpaid, the human and economic toll is intensifying.

Prediction market trends underscore waning confidence in a swift resolution. Polymarket odds for a Nov. 30 reopening stand at 96%, up from 87% on Oct. 6, while Kalshi users assign a 33% probability to a shutdown exceeding 15 days DelawareOnline^[1]. These figures align with Bank of America's historical average of 14-day shutdowns but suggest this episode could test market resilience.