qinbafrank|Nov 10, 2025 00:35
The government shutdown is nearing its end and what it means for the market. Last night, the market was driven by an ABC News report, citing insider sources that the Senate is preparing to vote on a 'temporary funding bill' on Sunday night Eastern Time (daytime today Beijing Time). The bill aims to reopen the government and avoid the shutdown. Key points of the temporary funding bill:
The content of the bill is actually not complicated:
1. Government funding will be extended until January 31 next year, essentially adding three more months, with the battle continuing in February.
2. Full-year funding will be provided for the 'Supplemental Nutrition Assistance Program' (SNAP) and the Department of Veterans Affairs to avoid repeated back-and-forth.
A senior Democratic senator stated that Democrats are likely to pass the Republican-proposed bill to reopen the government. Multiple sources indicate that the agreement does not include the key demand to extend subsidies for the Affordable Care Act. Ultimately, Democrats will only get a promise for a future vote on healthcare reform.
It seems that Trump’s earlier threats to abolish the filibuster rule have had an effect, and Democrats are starting to compromise. Of course, the record-breaking shutdown duration has already caused severe consequences, such as the SNAP assistance program for low-income groups and flight reductions, increasing political pressure on all sides. No one wants to drag this out any longer. So, a compromise and ceasefire will be reached for now, with further battles to come later.
If the shutdown does indeed end today, it will have significant implications for the market:
1) The most direct impact is what we discussed earlier: the government returning to normal operations, the Treasury starting to spend, and the TGA account, which has been like a dammed lake, finally being able to release funds. This will greatly ease the market's liquidity crunch. After all, the liquidity squeeze driving market adjustments recently has been directly caused by the government shutdown preventing fiscal funds from being spent.
Of course, we’ll still need to watch inflation trends, as this will be a key factor in determining whether rate cuts can continue in December.
2) Secondly, many fiscal policies from the July 'Big Beautiful Bill' (tax cuts, deregulation, etc.) can finally start to take effect. https://((x.com))/qinbafrank/status/1939463413144719767?s=46&t=k6rimWsEbo2D2tXolYcM-A. October marks the beginning of the U.S. government’s new fiscal year, but this year’s October started with a shutdown, leaving many policies from the Big Beautiful Bill hanging in the air.
3) Many policy advancements for the crypto industry can also resume. As mentioned before, https://((x.com))/qinbafrank/status/1970344152983560405?s=46&t=k6rimWsEbo2D2tXolYcM-A, the most important digital asset market structure bill for Q4 and policies like the SEC’s spring agenda on crypto innovation exemptions have been stalled due to the government shutdown. With the government back to normal, these policies can move forward again.
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