Government Shutdown Enters Record Length: Market Uncertainty Mounts

The U.S. government shutdown has reached its 35th day, a record-breaking period that parallels the longest shutdown in history from 2018 to 2019. This prolonged deadlock is significantly impacting financial markets, with analysts comparing the impact on liquidity to multiple interest rate hikes. Amidst this uncertainty, Senate Majority Leader John Thune has proposed a potential solution involving a short-term government funding bill and an extension of Affordable Care Act (ACA) subsidies. This proposal offers a crucial step toward resolving the impasse, addressing a key demand of the Democrats since September. Despite optimism from Republican lawmakers who expect to reach an agreement soon, with Senator Markwayne Mullin expressing confidence in a resolution by Wednesday night or Thursday, President Donald Trump has renewed pressure on Republicans to abolish the Senate filibuster rule, while internal disagreements among Democrats over the proposed compromise add further uncertainty regarding the final outcome.