The political deadlock in Washington shows no sign of breaking. The Senate failed to pass a funding extension on Monday, falling ten votes short of the 60 needed to reopen the government. That makes it the 11th failed vote since the shutdown began, marking three full weeks of frozen negotiations and fraying patience.
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The impasse centers on disagreements over Affordable Care Act subsidies and several smaller provisions that have become bargaining chips in the broader funding fight. Despite private discussions between congressional leaders, no substantive progress emerged overnight.
White House economic advisor Kevin Hassett sounded a cautious note Monday, saying he expects the shutdown to end “sometime this week.” But prediction markets disagree. In fact, data from Polymarket put the odds of a resolution before Oct. 31 at just 14%.
Markets Shrug as Wall Street Bets on Resolution
Remarkably, the market seems to have moved on. The S&P 500 (SPX) jumped 1.1% Monday, bringing it within striking distance of a record high. Investors appear confident that any political disruption will prove temporary, focusing instead on earnings momentum and rate-cut expectations from the Federal Reserve.
Historically, government shutdowns have had limited long-term effects on markets. But analysts warn that extended uncertainty could start weighing on sentiment if paychecks for federal workers, data releases, and agency approvals remain frozen into November.
For now, traders are treating the gridlock as political theater rather than a systemic risk. The Cboe Volatility Index (VIX) stayed below 20, signaling little investor anxiety.
Businesses Feel the Freeze as Approvals Stall
Not every sector can afford to shrug it off. British consumer goods group Unilever (UL) said Tuesday it would delay the planned spinoff of its ice cream business, Magnum, because the Securities and Exchange Commission (SEC) cannot process filings during the shutdown. The paperwork freeze means the new stock listing is literally, and figuratively, on ice.
The delay highlights how even global companies are vulnerable to a Washington stalemate. Other firms waiting on SEC reviews or regulatory clearance could face similar postponements, especially if the impasse stretches toward November.
The Longest Shutdowns in Perspective
The current closure now ties the 1995–1996 standoff, trailing only the record 35-day shutdown of 2018–2019. Each day adds pressure to lawmakers to strike a deal before essential services face deeper disruptions.
Federal workers are again caught in the middle, facing missed paychecks and growing uncertainty. Key economic data releases, already delayed, risk distorting the outlook for the Fed’s next meeting, scheduled for the end of the month.
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