US: The third government shutdown under President Trump – UOB Group

FXStreet Insights Team FXStreet

The US government began shutting down on 1 Oct 2025 after US congressional leaders failed to agree to a short-term funding bill beyond the 30 Sep US fiscal year-end due to disagreement on healthcare subsidies and other policy demands. This is the first government shutdown since Dec 2018/Jan 2019 during the first Trump administration. This is also the third shutdown under President Trump, UOB Group's Senior Economist Alvin Liew

It’s another US Government shutdown under President Trump

"The US government partially shut down starting on 1 Oct 2025, due to the congressional deadlock on a short-term funding bill over healthcare subsidies and other policy demands—marking the third shutdown under President Trump."

"Operational & Economic Impact: Around 750,000 federal employees may be furloughed, costing $400 million daily in lost compensation. Key economic data releases (e.g., jobs report, CPI) are delayed, potentially clouding the Fed’s Oct FOMC decision. Interestingly, despite furloughing the highest share of its employees among the various agencies of the government, the Commerce Department has shielded President Trump’s tariff and trade agenda from the shutdown."

"The uncertain length and risks for the latest shutdown: While markets remain calm as historical precedents pointed to short-lived shutdowns, the situation could worsen if mass federal employee layoffs occur as threatened by President Trump. Some of the moderate Senators (from both parties) reconvened on 1 Oct without any news of breakthrough, while the House remains in recess, making the shutdown’s end unpredictable at this juncture."

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