Partisan Deadlock Deepens: 20% Chance to End 35-Day Government Shutdown

The probability that the U.S. government shutdown will end between November 4–7 has dipped to 20% on Polymarket, reflecting persistent congressional gridlock as the shutdown enters its 35th day—the longest in modern history. The impasse, driven by partisan disputes over funding for healthcare subsidies and broader budget negotiations, has disrupted critical government functions, including food assistance programs and economic data reporting, according to a Reuters report. With the Federal Reserve and lawmakers closely monitoring the fallout, the prolonged shutdown is exacerbating fragilities in an already strained economy.

The current stalemate has pushed the government shutdown to a record 35 days, matching the 2018–19 standoff under President Donald Trump, Reuters reported. Senate Republicans, holding a narrow 53–47 majority, have failed to secure enough Democratic support for a stopgap funding bill, as Democrats demand extensions of healthcare subsidies for low-income Americans, Reuters added. Federal workers, including law enforcement and military personnel, remain unpaid, while essential services like the Supplemental Nutrition Assistance Program (SNAP) face partial suspensions, Reuters noted. The Office of Personnel Management (OPM), which will determine the shutdown's official end, has seen its operating status page become a focal point for resolution tracking on Polymarket.

Economic repercussions are mounting, with delayed data releases, noted on the MarketWatch calendar, complicating the Federal Reserve's ability to assess inflation and labor market conditions. Key indicators, including employment reports and manufacturing surveys, face potential delays or cancellations due to the shutdown. Federal Reserve Chair Jerome Powell has signaled caution about rate cuts, emphasizing the tension between inflation control and labor market stability in a New York Times live update. Meanwhile, the Congressional Budget Office estimates the shutdown has already erased $7 billion in economic output, with losses projected to reach $14 billion if the shutdown extends beyond eight weeks, according to an Economic Times report.

The shutdown has also disrupted global media operations, with Radio Free Asia (RFA) suspending news gathering and broadcasting due to funding cuts, as reported in a Shiawaves report. RFA, a U.S.-funded broadcaster targeting closed societies in Asia, has become a casualty of the political deadlock, raising concerns about the U.S. commitment to global press freedom, the Shiawaves piece added. Domestically, small businesses and contractors face financial strain, with 65,500 firms at risk of losing $12 billion in payments, the Economic Times analysis shows.

Prediction markets like Polymarket remain a barometer of public sentiment, though they now face regulatory scrutiny. Romania's National Office for Gambling recently blacklisted Polymarket, classifying its operations as unlicensed "counterparty betting," according to a Decrypt report. The regulator cited concerns over growing volumes in political markets, including those tied to Romanian elections. Polymarket, valued at $9 billion after a $2 billion investment from Intercontinental Exchange, has faced similar restrictions in France and the U.S. but continues to operate in key markets.

As the November 4–7 window looms, the 20% probability of a resolution remains low, with traders favoring later dates (33% for November 8–11 and 33.4% for November 16+), according to the Polymarket event. Political analysts note that the shutdown's resolution hinges on whether Democrats and Republicans can reconcile their demands, though current dynamics suggest no immediate breakthrough, Reuters analysts warn. The economic and social costs of prolonged dysfunction are growing, with experts warning that a recession could emerge if confidence erodes further, the Economic Times report cautioned.