Government Shutdown Odds Spike To 80% As Funding Deadline Approaches

Are you prepared for Government Shutdown 2: Electric Boogaloo? As Congress scrambles to keep away from one other shutdown by a funding deadline of Friday at midnight, prediction markets are exhibiting confidence ranges of almost 80% that the federal government goes to shut, once more.

In the wake of Immigration and Customs Enforcement’s (ICE) techniques in Minneapolis — which incorporates the deadly shootings of Rene Good and Alex Pretti — Senate Democrats appear adamant to not move the $1.2 trillion funding package deal that cleared the House of Representatives final week, until funding for the Department of Homeland Security is reduce. And this has prediction market merchants pricing a high degree of certainty {that a} second shutdown inside in 5 months is coming.

As of Tuesday night (Jan. 27), Polymarket’s odds of a shutdown taking place have been hovering round 78%. The “US Government Shutdown Saturday?” market had over $12.1 million in commerce quantity. The market would resolve “Yes” if the U.S. Office of Personnel Management (OPM) broadcasts one other federal authorities shutdown as a result of a lapse in appropriations by January 31, 2026, 11:59 PM ET. Otherwise, this market will resolve to “No.” Meanwhile, Kalshi’s shutdown market (“Government shutdown on Saturday?”) was buying and selling round 77% in favor of a shutdown with $10.4 million already traded and $3 million in open curiosity in the marketplace.  

With so many conflicting headlines on the topic proper now, we check out what the prediction markets are telling us a few potential shutdown.

Another authorities shutdown? Check the prediction markets

The same Polymarket query — “U.S. Government Funding Lapse on January 31?” — is buying and selling at 90% for Yes as of Tuesday night. A “funding lapse” would entail President Trump “failing to signal the related invoice(s) extending authorities funding by January 30, 2026, 11:59 PM ET.” 

Polymarket additionally presents a market on how lengthy this potential second shutdown would final. There is at the moment optimism that it wouldn’t go so long as the final, which closed the federal government for 43 days. Current projections embody:

• 79% of it going 1+ days ($157k vol.)
• 74% odds that it will final 3+ days ($66.9 vol)
• 54% odds it will go over per week (7+ days)
• 28% odds it will last more than a fortnight

More than a month and greater than two months are buying and selling at 15% and three%, respectively.

One would possibly contemplate prediction markets pretty much as good weathervanes for potential governmental modifications and political odds. For most of January, Polymarket odds of a shutdown have been reducing, to be anticipated because the funding deadline acquired nearer. In truth, they have been as little as 9% on the morning of Jan. 24. But, twelve hours later within the wake of a second protester killed by ICE in Minnesota, the chances had skyrocketed to 80%, the place it has hovered ever since.

Will Willard of The Oracle Substack observed that Polymarket consumer @semi (aka @slight-) was the highest holder of “Yes” for the shutdown market, which was buying and selling at 22% when he took up the place three weeks earlier than the spike. When Willard requested the dealer in regards to the wager, the consumer replied, “I don’t really feel that strongly about it. To be trustworthy, it simply looks as if a great value.” The similar dealer later informed The Oracle:

“ICE is so controversial amongst Dems, they usually’re going to must vote to particularly authorize it. Trump is being so aggressive in so many various areas proper now. There are so many ways in which Dems may simply explode and never wish to fund ICE.” The dealer additionally decided that since “ICE is so controversial amongst Dems” and that they have been “policing so many various locations without delay,” he figured that the chances of “one thing actually bizarre taking place” and upsetting a shutdown have been “fairly high.”

“The Democrats’ concrete calls for are: ICE must cease carrying face masks, a full unbiased investigation, civil liberties protections, and by no means detain US residents,” stated @semi. “This is a multi-week negotiation. It simply doesn’t seem to be one thing that occurs in a single week.”

It’s true. The subject is time—and timing. This dealer’s timing was robust as the worth of that preliminary funding has already multiplied by almost 4X.

Why a shutdown is wanting so probably at this level

The Republican-controlled House of Representatives handed a multi-bill funding measure on Jan. 22 with a razor-thin margin, 220-207. The vote was predominantly alongside celebration strains, with seven House Democrats becoming a member of Republicans to move the invoice. The funding allotted one other $10 billion for ICE on prime of the $76 billion the company is meant to obtain over 4 years, because of President Donald Trump’s “One Big Beautiful Bill.”

Two days later, the deadly capturing of Alex Pretti, a 37-year-old intensive care nurse, passed off. Voters irate that the House Dems crossed strains to vote with Republicans two weeks after the capturing of Renée Good have been incensed, and the Senate was listening.

“Senate Democrats won’t permit the present DHS funding invoice to maneuver ahead,” Senate Minority Leader Chuck Schumer stated in a press release on Jan. 25. “The appalling murders of Renee Good and Alex Pretti on the streets of Minneapolis should lead Republicans to hitch Democrats in overhauling ICE and CBP to guard the general public. Senate Republicans should work with Democrats to advance the opposite 5 funding payments whereas we work to rewrite the DHS invoice.”

Any modifications to the funding package deal require it to be despatched again to the House of Representatives for an additional vote. And the House is at the moment in recess. Add there was simply an enormous snowstorm in D.C.

To keep away from a shutdown, the Senate must move its measure, get Speaker Mike Johnson (who by no means appears in a rush to get something executed) to recall the House and vote on that invoice — all inside a couple of days.

How this shutdown would differ from the final one

This shutdown shall be totally different than the final.

Trader @semi thinks that ultimately, the Democrats will “begin eager about the approaching midterms and cave, like final time. But it should take a number of weeks.”

But issues are totally different than final time. This time round, Congress has already handed, and President Trump has signed into legislation, six of the 12 full-year-appropriation payments. This time, the Departments of Justice, Commerce, Agriculture, Interior and Veterans Affairs, in addition to the legislative department, would keep open, according to NBC News. SNAP Benefits would even be unaffected, in contrast to within the final shutdown.

The majority of the $1.2 trillion in these remaining appropriations payments are designated for the Defense Department ($831 billion). The Pentagon and DHS would shut down, together with the Departments of State, Treasury, Transportation, Health and Human Services, and Housing and Urban Development (HUD).

The Federal Emergency Management Agency (FEMA), the Transportation Security Administration (TSA), and the Coast Guard would nonetheless function, however their workers wouldn’t be paid.

The 2025 Government Shutdown lasted for 43 days, the longest in U.S. historical past. Eight Senate Democrats ultimately caved, siding with Republicans to move a funding deal with out renewing the well being care subsidies of the Affordable Care Act. We will quickly discover out whether or not the Dems will stand their floor, and in that case, for the way lengthy. In the meantime, prediction markets will proceed to offer helpful forecasts round chance of one other authorities shutdown, in addition to how lengthy it may final.

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