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Investing.com -- Piper Sandler analysts believe a U.S. government shutdown is unlikely as momentum builds for a temporary funding measure that would keep operations running through September 30, 2025.
"The probability of a government shutdown on March 14 has been elevated for several months," the analysts wrote, citing Democrats’ insistence on limiting President Trump’s authority as a key sticking point.
However, the firm said the recent shifts in GOP unity and Democrats’ fading confidence in their leverage suggest a resolution is near.
House Republicans are set to vote on a continuing resolution (CR) that freezes spending at existing levels.
Piper Sandler expects the bill to pass along party lines. "Once it makes it over to the Senate, at least eight Democrats will need to join Senate Republicans to prevent a shutdown," they noted.
The firm added that "a growing number of Senate Democrats seem prepared to vote for the bill."
Former President Donald Trump has urged Republicans to back the measure, with Piper Sandler stating this has helped secure support from key members of the Freedom Caucus, though Rep. Thomas Massie (R-KY) remains a likely holdout.
If the House clears the bill, Senate opposition is expected to fade. The firm notes that Sen. John Fetterman (D-PA) stated, "I’ll never vote to shut our government down. That’s chaos."
The CR would boost defense spending by $6 billion while cutting non-defense spending by $13 billion. Piper Sandler analysts anticipate that later in the year, Republicans will push for a budget reconciliation bill to increase defense spending by at least $100 billion.