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U.S. Government shutdown before 2025?

This market will resolve to "Yes" if the U.S government shut down occurs between August 30, and December 31, 2024, 11:59 PM ET. Otherwise, this market will resolve to "No". The market will resolve to “Yes” if the acting President fails to sign the relevant bill(s) extending government funding by the applicable deadline(s), even if no government shutdown is explicitly announced. For this market to resolve to "Yes" any shutdown will count. If only a portion of the US government is covered by any signed bill(s) extending funding of the US government, and a portion of the US government goes unfunded, this market will still resolve to "Yes". The primary resolution for this source will be official information from the US government, however a consensus of credible reporting may also be used.

Event Details

Total Volume: $123.8K
24h Volume: $0
Total Liquidity: $18.5K
Markets: 1
Event Ends: 12/31/2024

Event Analysis

Summary

The question of whether a U.S. government shutdown will occur before 2025 hinges on complex political dynamics during a critical election year. With multiple funding deadlines approaching in early 2024 and heightened political tensions due to the presidential election cycle, there are significant risks to government funding continuity. However, recent developments suggest decreasing shutdown risk, including the successful passage of continuing resolutions and growing bipartisan cooperation on funding measures. While political brinkmanship remains possible, especially around the March 2024 deadlines, the likelihood of a full government shutdown appears lower than previous market estimates suggested.

Analysis

Economic and Political Background

Current Economic Context

  • U.S. economy showing resilience despite inflation concerns
  • CBO projections indicate growing federal deficits and debt through 2054
  • Interest rates remain elevated, increasing cost of government borrowing
  • Demographic trends putting pressure on federal spending programs

Political Landscape

  • Divided government with narrow Republican House majority
  • Presidential election year dynamics affecting negotiations
  • Multiple funding deadlines in March 2024 requiring bipartisan agreement
  • Historical pattern of using continuing resolutions to avoid shutdowns

Outcome Analysis

Scenario 1: No Shutdown (96.5% Current Market Probability)

Supporting Factors:

  • Recent successful passage of "clean" continuing resolutions
  • Bipartisan cooperation on funding measures
  • Political cost of shutdown during election year
  • Speaker Johnson's demonstrated ability to work across aisle

Risks:

  • March 2024 funding deadlines
  • Potential election-related brinkmanship
  • Far-right opposition to compromise

Scenario 2: Shutdown Occurs (3.5% Current Market Probability)

Supporting Factors:

  • Historical precedent for election-year shutdowns
  • Ongoing partisan tensions
  • Complex appropriations process
  • Freedom Caucus resistance to spending

Key Factors to Watch

  1. March 2024 Deadlines
  • March 1 and March 8 funding deadlines
  • Progress on appropriations bills
  • Bipartisan negotiation developments
  1. Election Dynamics
  • Presidential primary outcomes
  • Congressional election polling
  • Party messaging on spending
  1. Economic Indicators
  • Inflation trends
  • GDP growth
  • Federal deficit levels

Recent Developments

  • Successful passage of continuing resolution through February
  • Formation of bipartisan AI task force showing cooperation possible
  • Speaker Johnson emphasizing practical governance approach
  • Growing focus on FY2025 budget process

Prediction

I predict a 92% probability of NO shutdown occurring before 2025, with an 8% chance of YES. This differs from current market prices, suggesting the market is slightly overconfident in avoiding a shutdown. While recent developments are encouraging, election year dynamics and March funding deadlines present meaningful risks that aren't fully priced in.

U.S. Government shutdown before 2025?

Yes:8.0%
No:92.0%
Confidence: 7/10
Reasoning Score: 8/10

Sources

Market Options

U.S. Government shutdown before 2025?

Yes
3.5%
No
96.5%
Liquidity: $18.5K
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