Senate negotiators say they are making progress toward avoiding a government shutdown, but Kalshi traders have become slightly more concerned that funding talks could still break down.
Kalshi's Oct. 1 shutdown market has climbed to 35%, up roughly seven percentage points in recent trading.
For informational purposes only. Not trading advice. See full disclaimer below.
Senate deal
The market may be on the upswing, but senators seem confident they can make a deal to avoid another government shutdown.
According to The Hill's Alexander Bolton, negotiators in both parties are nearing an agreement that pairs a short-term spending package with new limits on a pending Office of Management and Budget regulation. If finalized, that regulation would let political appointees block spending that lawmakers have already approved.
Under the working framework, funding would extend to Dec. 4. Several Democrats told The Hill they read the package as an implicit commitment from Republican leadership to delay a Trump-backed reconciliation push until the midterms are behind them.
Any agreement limiting those powers could draw opposition from President Trump and potentially derail a funding deal.
Democrats are not the only congressional leaders looking to limit White House appointees' appropriation powers. Senate Appropriations Committee Chair Susan Collins has led the effort on the Republican side to rein in the proposed rule. "I certainly think that the rule is deeply flawed. I wrote the first letter from a senator to the [Office of Management and Budget] to express my opposition," Collins said. "There's a huge group of organizations that have come out against it."
Collins pressed her case directly in a July letter to OMB Director Russ Vought. Among her objections: the rule would empower agencies to yank grants and other awards after the fact, and would in her words "conflict with Congress's control over the federal funding process."
She also cited concerns about the impact on rural areas, on medical and scientific research, and on the researchers and clinical trial patients who rely on federal grant funding.
The chances of a shutdown
Despite previous showdowns over budget issues in the House and Senate, senators seem more optimistic about avoiding a shutdown ahead of the Oct. 1 deadline.
Axios reported that the House passed a short-term spending bill late Tuesday, July 21, 2026, but Senate Majority Leader John Thune is expected to set it aside as senators work on their own continuing resolution.
Neither side wants another government shutdown. Democratic Sen. Jeanne Shaheen said, "People understand that it would be helpful to have a [continuing resolution] that extends beyond the election. So it doesn't get all bound up in partisan discussions around the elections."
Republicans expressed similar optimism about reaching a deal in time. Sen. Roger Wicker said, "Perhaps we can get ours passed, and then when the House comes back the last week of August, they can pass it there. I don't think there's going to be much controversy there, unless the Democrats change their minds."
Sen. Brian Schatz said negotiators are "trying to give ourselves room to find a bipartisan agreement, and we are not there yet." Asked whether the vibes between the parties were positive, Schatz replied, "Not negative."
Those encouraging signals from negotiators may explain why the shutdown market still sits under 40%, even after its recent uptick.
The takeaway:
Kalshi markets now predict:
Government shutdown on Oct. 1: 35%
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