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As the dust settles following the midterm elections, many are looking towards the next political showdown, with traders speculating on the odds for a government shutdown in December.
Funding the government has been a point of contention several times during President Donald J. Trump’s two terms in the Oval Office. However, while Trump is viewed as intransigent, having compelled Republicans in Congress to go along with his hardline tactics and oversaw the three longest shutdowns in the history of the Republic, shutdowns also occurred under every president going back to President Jimmy Carter.
The Democratic blowout in the midterms will give them a significant majority in both the House of Representatives and the Senate. Their resounding victories at the ballot box have clearly emboldened the more pugilistic wing, and they want to try and get a running start in what is sure to be two years of trading blows with a politically wounded Trump approaching the end of his presidency. There is some justification in that viewpoint given how Republicans were trounced not just in blue states; not just in purple states; but in ruby red states as well.
Trump’s brief attempt at magnanimity in the aftermath of the midterms in which he expressed a willingness to work with Democrats lasted a few days before he forced out Chief of Staff Susie Wiles and replaced her with Stephen Miller, someone not known for his pragmatism. With the possibility that Trump will now restart the unpopular Iran war — repeatedly referenced as one of the primary reasons the GOP lost so badly — Democrats are taking action with the one tool at their disposal to stop it: money.
Government funding runs out less than a month from now unless Congress acts. Given the landscape, there is increasing concern that both sides will try to use that deadline to their advantage. Prediction markets offer the opportunity to weigh in as to whether there will be a shutdown on Dec. 12, 2026.
Odds for December Government Shutdown? Trade on Prediction Markets
Trading volume is light at the moment, sitting just over $250k, but it’s certain to rise as more attention is paid to this ongoing debate/threat of a government shutdown.
Currently, the implied probability for a shutdown is in the mid-40s.
For those who want to jump in, the Kalshi promo code offers a $55 sign up bonus for new users.
The rules state that if the U.S. federal government is subject to at least a partial shutdown because of a lapse of appropriations at 10 AM ET on Dec. 12, 2026, the market will resolve to Yes. The Office of Management and Budget and United States Office of Personnel Management will verify the outcome.
Circumstances Make a Govt. Shutdown Likely
In short, what is the motivation for either side to show flexibility without garnering substantial concessions in terms of policy?
For the departing Senate Republicans, there could be a vengeful factor in getting back at the Trump administration for its clear complicity in costing these elected officials their seats. Could Sens. John Cornyn, Susan Collins, and Thom Tillis join with a unified Democratic caucus to hold off on funding the government to try and stop the Iran war? None of the three are Trump fans. Cornyn was forced out of the race due to his Trump-facilitated primary loss to Ken Paxton. Collins was viewed as ineffectual, wagging her finger at Trump, but ultimately backing down amid the nonsensical “he’s learned his lesson” delusion when she knew the only lesson he learned was that he could do what he wants, as evidenced by the Iran war. Tillis essentially said, “enough of this,” and left on his own.
Still, the Democrats who are pushing for this type of hardball are ideologues like Sen. Bernie Sanders. Joining Sanders is Sen. Chris Van Hollen, who is likely trying to curry favor with the Sanders wing for his push to replace Sen. Chuck Schumer as majority leader. They are speaking for the incoming Senators like Abdul El-Sayed and others, many of whom are Democratic Socialists and want to remake the entire government. These Senators-elect are feeling frisky after the Election Day avalanche. Once they’re in office, the Senate veterans will rap their knuckles so they know their place. But that’s not happening yet.
Others like Sen. Richard Blumenthal are stopping short of making threats despite wanting to end the Iran war.
The short-term funding bill passed in September was a matter of pragmatism from all involved, even Trump.
Now?
Trump is already trying to punch his way out of trouble and sending the enforcers out on the ice by naming Miller his new chief of staff. He’s not going to capitulate to either the Democrats or the Iranians. Expect more aggression in the coming months. Perhaps the only reason that there has yet to be a renewed series of attacks in Iran is that Israel is still navigating its own political future with a sidelined Benjamin Netanyahu.
Based on these factors, there’s really little to lose for the Democrats to try and corner Trump. Expect them to galvanize and force a shutdown, hoping the president makes a series of errors in his reactive rage to further weaken his position.
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Source: federalnewsnetwork.com
