Government shutdown odds spike ahead of Valentine’s Day

As funding talks fizzle between the GOP and Democrats in Congress, traders are expecting a partial government shutdown to begin this weekend. Kalshi markets now show an 82% chance of a shutdown beginning on Saturday.

Earlier this year, the most recent shutdown was ended after only a few days when Democrats and Republicans reached a deal by splitting a spending bill into separate packages. President Donald Trump signed these separate packages February 3rd, ending the four-day government standoff.

However, one of those packages only provided two weeks’ worth of funding for the Department of Homeland Security. While this agreement ended the broader funding fight, a long-term deal on DHS funding remains elusive.

Now, negotiations appear to be breaking down again. Neither side seems hopeful that they can avoid a second partial government closing. Democrats are demanding reforms to ICE and Customs and Border Protection (CBP) before they agree to vote for any additional DHS funding, but Republicans aren’t budging on the issue.

The Hill reports that an anonymous Democratic senator claims the eight Senate Democrats who voted to suddenly end the record-setting 43-day government shutdown last November are not budging on their demands. The senators will not agree to even a short-term deal until Republicans agree to implement significant reforms to DHS agencies. Senate Minority Leader Chuck Schumer said that it’s “hard for me to believe” that Democratic senators would vote for another short-term measure.

Even though the potential shutdown would be partial, it could cause some significant disruptions beyond ICE and CBP operations, including temporary disruptions and employee pay delays at agencies such as the Transportation Security Administration (TSA), the Federal Emergency Management Agency (FEMA), and the U.S. Coast Guard.

Kalshi traders now predict:

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