How will the U.S. government shutdown end? Goldman Sachs predicts: October 15 is the key point

The ongoing shutdown of the U.S. government is raising market concerns about political uncertainty. Recently, Goldman Sachs' Chief U.S. Political Strategist Alec Phillips released a research report analyzing that the current deadlock will ultimately end through some statement or concession from Trump, who needs to publicly express a willingness to discuss relevant health issues. The Democrats may then agree to reopen the government at least temporarily, after which both sides will continue negotiations on other issues. Phillips believes that the government shutdown could last for several weeks, but it is unlikely to extend beyond the military payday on October 15. If the shutdown continues at that time, active-duty military personnel will miss their entire paycheck, a situation that has never been allowed to occur before. Data from the prediction platform Polymarket shows that the probability of the government shutdown lasting at least another 10 days has risen to 75%. Meanwhile, the continued rise in the stock market has weakened traditional market pressure mechanisms. The stock market, which would typically plummet due to a government shutdown, has instead continued to rise to historical highs, diminishing the market's ability to pressure Washington. Goldman Sachs' Head of Foreign Exchange Strategy Mike Cahill stated that widespread government shutdowns typically do not last long, as they are considered too destructive. Cahill believes the most obvious recent market impact is lower volatility pricing due to a lack of data to substantively change people's views or policy direction. Military Payday Becomes a Key Node Phillips expects that starting Monday, the House and Senate will vote every couple of days. The key issue is how many Democrats will change their stance and vote to reopen the government. Currently, three Democrats have done so, and five more are needed. This shift will not happen immediately but will occur over time. October 15 is military payday, and if the shutdown continues at that time, active-duty military personnel will miss their entire paycheck. Goldman Sachs believes that not many people will want to see this happen, and it has never been allowed to occur before. Phillips' judgment is that while the shutdown may last for a few weeks, it is unlikely to extend beyond military payday, with a higher likelihood of achieving results before October 15. Healthcare Subsidy Bill Set to Expire, Focus on Trump's Statements The current U.S. government spending authorization is set to expire (in mid-November), and the two parties are at an impasse at the last moment. Wall Street Journal previously mentioned that the Republicans advocate for a temporary extension of government spending authorization "without additional conditions," meaning no bundling of any other policies. The Democrats reject this "clean" extension, arguing that the Affordable Care Act (ACA), which expires at the end of the year, will announce the premium increases for affected populations on November 1. If this is not resolved now, the public will face soaring premiums. Therefore, the Democrats believe this is the last opportunity to include the subsidy extension in the spending bill. However, Goldman Sachs further points out that even if Congress traditionally reaches a bipartisan compromise, the Republicans may still later use the "reconciliation process"—where the president submits a budget-cutting proposal to Congress, which can be overturned with a simple majority (just the Republican party) to nullify the original spending plan This makes it difficult for the Democrats to trust any "pass first, remedy later" commitments. Therefore, Goldman Sachs analysis believes that once Trump expresses a willingness to discuss health issues, the Democrats are likely to accept and agree to at least temporarily reopen the government. Subsequently, both sides will continue to negotiate on other contentious issues. This solution provides a stepping stone for both parties and creates space for further negotiations