Prediction markets are flashing warning signs that a U.S. government shutdown is far from a distant prospect. Data from markets suggest there is now roughly a 66% probability of a shutdown this year. That estimate comes in the wake of the Senate failing to pass a stopgap spending bill.
What makes prediction markets powerful here is their immediacy—they aggregate real money or at least strongly incentivized bets, so they move quickly when the balance of political risk shifts. In this case, traders responded to the Senate's rejection of funding legislation, with "no" to the stopgap bill increasing the perceived likelihood of disruption.
