71% Chance of Government Shutdown on October 1 as Legislators Delay Funding Agreement

Polymarket, a prediction market platform, currently estimates a 71% chance that the U.S. government will shut down by October 1, 2025, highlighting growing concerns over congressional budget disputes. This probability is based on a market with $920,063 in trading activity and signals a strong possibility of either a partial or complete shutdown if funding lapses. The market will resolve as “Yes” if the Office of Personnel Management (OPM) declares a shutdown by October 1, not counting closures for weather or holidays.

Negotiations between Democrats and Republicans have become more contentious as both sides struggle to reach a funding agreement. House Republicans have suggested extending funding until November 21, but Democrats have pushed back due to disagreements over healthcare and Medicaid provisions. Senate Minority Leader Chuck Schumer has called for bipartisan cooperation, warning that a lack of compromise could result in a shutdown. Meanwhile, Polymarket’s figures reflect investor concerns, with over $1.79 million wagered on a broader 2025 shutdown market, which currently assigns a 43% probability to a shutdown by the end of December.

Economists are warning about the possible fallout from a lengthy shutdown. Gregory Daco from EY-Parthenon projects that each week of government closure could reduce U.S. economic output by $7 billion, worsening existing challenges in sectors such as labor and housing. A shutdown could also postpone key economic reports, like October’s jobs data, making it harder for the Federal Reserve to set policy. Additionally, agencies like the SEC and CFTC would be forced to scale back operations, potentially delaying IPO approvals and market regulation.

The effects on vital government services and programs are a major concern. While mandatory funding would keep Social Security, Medicare, and Medicaid benefits flowing, administrative tasks such as verifying benefits and replacing Medicare cards could be interrupted. Air traffic controllers and TSA staff would continue working without pay, but postal services would not be affected.

Investors are paying close attention to how long any shutdown might last, as past events show that even short disruptions can increase uncertainty. The 34-day shutdown in 2018-2019, the longest in U.S. history, impacted more than 800,000 federal employees and weakened consumer confidence. Current prediction markets estimate a median shutdown duration of five days, but experts warn that a longer closure could heighten economic risks.

Source: [1] Over 43% chance of U.S. government shutdown in 2025: Polymarket [2] US government shutdown by October 1? [3] Government shutdown chances as Republicans roll out… [4] How a U.S. government shutdown might impact financial markets [5] The federal government is heading toward a shutdown. Here's… [6] Government Shutdown Likely On October 1, Per…