Odds the government shutdown will drag deep into the month rocketed overnight as traders saw no end in sight.
When the federal funding halt came into effect at midnight on Wednesday, prices on prediction markets showed that a week-long shutdown was the consensus view.
But now those odds have shifted dramatically with a forecast of 13 days the prevailing view among traders on the regulated exchange and prediction market site Kalshi.
A bet of $100 on a funding freeze lasting for 10 days now earns a $59 profit, while betting against that scenario earns $154 payout. The implied probability is 62 percent.
The probability of the government shutdown extending for more than 15 days stands at 40 percent, while a 35-day impasse is chalked up at a 15 percent chance.
The last government shutdown, which was under Donald Trump in 2018, lasted for a record-breaking 34 days in a furious battle over funding for his border wall.
When the federal funding halt came into effect at midnight on Wednesday, prices on prediction market showed that a week-long shutdown was the consensus view. But now those odds have shifted dramatically with a forecast of 13 days becoming the predominant view among traders on prediction market Kalshi
For now, Democrats are dug in on their demands for extending health care subsidies before they will agree to a funding deal.
Reaching the 60-vote threshold in the 100-member Senate would require five additional Democratic votes. That would be needed to green-light the House-passed bill.
Trump signaled Thursday that he plans to follow through on his threat for mass layoffs of US federal workers as he ratcheted pressure on Democrats.
The president announced he would meet budget chief Russell Vought ‘to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent.’
Trump’s announcement on his Truth Social website came with the government entering the second day of a stoppage that is expected to see 750,000 employees sent home without pay across a wide range of agencies.
Vought told House Republicans on Wednesday many of those workers would be targeted for permanent layoffs to be announced in the next day or two, echoing Trump spokeswoman Karoline Leavitt’s threat that firings were ‘imminent.’
Leavitt told reporters on Thursday the job cuts were likely going to number ‘in the thousands.’
Trump has emphasized that he views cutbacks as a way of increasing pain on Democrats, arguing that ‘we can do things during the shutdown that are irreversible, that are bad for them and irreversible by them.’
Senate Democratic Minority Leader Chuck Schumer and his House counterpart Hakeem Jeffries have dismissed the job cuts threat as an attempt at intimidation and said mass firings would not stand up in court.
Two Senate Democrats and an independent who votes with the party, have broken with their colleagues but the rest have been voting against a House-passed resolution to keep the government funded at current levels through November 21.
The Senate is not voting on Thursday because of the Jewish Yom Kippur holiday, but another vote is expected on Friday and on most days until the standoff is resolved.
