Deal Near

Senate Progress Sparks Hope for Shutdown Deal

The US Senate has advanced a funding bill that could end the longest government shutdown in American history. The vote was razor-thin: just 60-40 in favor of the deal — the minimum required to overcome a Senate filibuster. The bill would fund most agencies through January, leaving the door open to another shutdown.

Next steps:

• Bill debated and approved by the House of Representatives.
• Sent back to the Senate for final passage.
• Signed by President Donald Trump.

Shutdowns Disrupt People, Data, and Services

The US government shutdown has suspended services nationwide. 1.4 million Americans are on unpaid leave or working without pay.

Other impacts:

• Disruption to food aid for 41 million low-income Americans.
• Paused operations at agencies and national parks.
• Crucial economic data releases delayed or cancelled.
• Delays in air travel due to staffing shortages, with the peak holiday season approaching.

Why Does This Keep Happening?

Most democracies have mechanisms in place to fund government services even if lawmakers struggle to agree on a budget. This used to apply to the US as well.

A 1980 Attorney General ruling reshaped the rules: federal agencies can’t spend without approved funding. That means each fiscal year, starting in October, brings the risk of a government shutdown.

Just like this time, lawmakers often come up with a stopgap measure that can keep the lights on temporarily. This “kicking the can” approach means multiple shutdowns in the same year are possible.

Markets React to Shutdown Standoff

From a market perspective, the biggest issue is the data blackout. The Federal Reserve relies on fresh data to guide interest rate decisions — but key reports on inflation and jobs are delayed or cancelled. 

Markets responded cautiously to the Senate’s breakthrough.

• US treasury yields dipped as fiscal risk eased.
• Global stocks edged higher, with airlines boosted by hopes of restored air traffic control staffing.

Wall Street is used to budget standoffs, although a prolonged shutdown could start eroding confidence. The real source of volatility lately? Tech stock valuations, not the shutdown.

Government Open Ahead of Holidays?

Congress is trying to break the gridlock on the longest US government shutdown on record.

A Senate-backed deal would fund most agencies through January, but it still needs the House's approval and the President’s signature.