40-Day Longest US Shutdown Resolution 'Imminent'

       

The 2025 US federal government shutdown set a new record of a staggering 40 days, casting a deep shadow over the US economy and global financial markets. However, the shutdown's resolution has become imminent after the US Senate recently passed a procedural vote on a Continuing Resolution (CR). This article analyzes the potential market impact and the strategies investors should adopt when the shutdown ends, based on the latest negotiation status.

   

   

40-Day Longest US Shutdown Resolution 'Imminent': Financial Market Outlook and Investment Strategy

   

1. The Real Impact and Political Reversal Caused by the Record-Breaking Duration

   

As this shutdown persisted for an unprecedented 40 days, the economic cost ballooned. Unlike past shutdowns, which were often dismissed as relatively short-term events, this incident escalated into a real social problem, prompting a change in stance among politicians.

   

The most decisive factors driving the change were the disruption in budget execution for the Supplemental Nutrition Assistance Program (SNAP) for low-income families and the severe air traffic chaos caused by the shortage of air traffic controllers. A dramatic breakthrough was achieved when moderate Democratic lawmakers, recognizing the severity of these issues, shifted their stance toward ending the shutdown. This happened because the shutdown was no longer merely a fight over political principles but had become a 'live round' issue, directly harming the lives of the general public.

   

It cannot be overlooked that the longer the shutdown lasted, the more uncertainty was amplified—such as the halt of corporate IPO reviews and the delay in the announcement of key economic statistics (GDP, employment reports, etc.)—leading to a situation where the economy was 'driving blind.'

   

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2. Financial Market Reaction to the Anticipation of Resolution

   

As the quorum for the passage of the temporary budget bill was secured in the Senate, the market reaction was immediate. Risk aversion weakened, which is also affecting the foreign exchange market, evidenced by the decline in the dollar-won exchange rate (strengthening of the Korean won).

   

The core reason for the market's positive reaction is the resolution of uncertainty. Investors view the shutdown itself not as a problem with fundamental economic fundamentals but as a temporary political risk. Therefore, the expectation is that once the shutdown is resolved, suppressed investor sentiment will recover, and the market will quickly rebound as the release of economic indicators normalizes. Historically, there have been many instances where the S&P 500 index unexpectedly rose during a shutdown or sharply rebounded after its resolution.

   

However, since the procedural uncertainty remains—that the bill must ultimately pass the House and receive the President's signature to be fully resolved—the market is closely monitoring the final outcome.

                     

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3. Conclusion: Short-Term and Long-Term Strategies for Investors to Note

   

The phase of the shutdown's resolution offers investors opportunities to capitalize on short-term volatility. The strategies a wise investor should focus on are as follows:

   

       
• Utilize Short-Term Volatility: Opportunities for buying low can be sought in quality assets that temporarily fell due to the prolonged shutdown, or in sectors that reacted sensitively to the uncertainty (e.g., government contracting companies). The shutdown's resolution is highly likely to provide short-term buying momentum.
       
• Prepare for Economic Indicator Normalization: Key economic data, such as the employment report and inflation indicators (CPI), which were delayed during the shutdown, will be released immediately after its resolution. Since the market will re-evaluate the direction of the US Federal Reserve's (Fed) interest rate policy based on these indicators, a thorough analysis of the announcement schedule and content is crucial.
       
• Focus on Long-Term Fundamentals: After the political risk is resolved, corporate earnings and macroeconomic fundamentals ultimately have the greatest impact on stock prices. Investors should adhere to a strategy of focusing on assets with guaranteed long-term growth, moving beyond the short-term issue of the shutdown resolution.
   

   

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        Conclusion: Time to Turn the Investment Clock Where the Political Clock Stopped
        The anticipation of the shutdown's resolution, arriving after 40 days, is providing relief to the market. The end of the political paralysis signifies the disappearance of the biggest pillar of market uncertainty. Investors should use this moment both to seize short-term recovery opportunities and to review their long-term investment direction through normalized economic indicators.    

   

This is a KBS report covering the start of the US government shutdown that serves as the background for this blog post. 👉 US Government 'Shutdown' Commences...\"Economic Damage\"/Trump Starts 'Civil Servant Firing Spree'...Great Catastrophe Predicted

   

       

The content of this blog is for reference in investment judgment only, and investment decisions must be made under individual judgment and responsibility. Under no circumstances can the information in this blog be used as evidence for legal liability regarding investment results.