Trump signs bill ending the U.S. government shutdown after 4 days, but concerns remain in mid-February

President Trump signed the funding bill on February 3, ending a 4-day partial government shutdown, but the Department of Homeland Security funding was only extended until February 13, with subsequent negotiations still at risk.
(Background summary: Trump stated he does not want the U.S. government to shut down: he will avoid a shutdown through “bipartisan cooperation,” but the market does not buy it)
(Additional background: The prediction market signals a “detonation signal”: the probability of a U.S. government shutdown has plummeted to 47%)

Table of Contents

• Ending the 4-day brief shutdown
• Economic impact and subsequent risks
• Immigration enforcement controversy becomes a bipartisan battleground

The U.S. federal government officially entered a partial shutdown at 12:00 a.m. on January 31 (Eastern Time). Although most appropriations bills have been passed and signed by the President, funding for core areas such as defense, health, and education has not been timely allocated, leading to the suspension of non-essential federal employees and potential delays or interruptions in some public services.

Ending the 4-day brief shutdown

Just a few hours ago, President Trump signed the funding bill at the White House, ending the 4-day partial government shutdown. According to foreign media reports, this bill ensures that departments such as Defense, Education, Transportation, and Labor can operate until the end of the fiscal year on September 30.

The House passed the bill with a narrow margin of 217 to 214 votes, indicating a high level of partisan opposition.

Economic impact and subsequent risks

Analysis shows that during the shutdown, about 200,000 DHS Homeland Security employees faced unpaid work, and the PERM labor certification and H-2 visa systems were temporarily disrupted. Additionally, the non-farm employment report release and IRS tax season operations were affected, all of which are key data sources for fundamental analysis of the U.S. stock market.

What to watch next is that, although Trump successfully averted this crisis, the Department of Homeland Security was only granted a two-week temporary funding extension. If the two parties cannot reach an agreement on immigration enforcement policies before February 13, the risk of another government shutdown remains.

Immigration enforcement controversy becomes a bipartisan battleground

This arrangement mainly stems from two recent fatal federal immigration enforcement incidents in Minneapolis, Minnesota, which prompted Democrats to call for reforms and increased accountability regarding ICE use of force. The two parties compromised by temporarily separating DHS funding to continue negotiations on reform details.

This incident intensified Democrats’ doubts about law enforcement powers, demanding explicit legal restrictions, including mandatory body cameras and bans on arrests without warrants. DHS Secretary Noman announced the full deployment of body cameras in response to public opinion.

However, Democrats believe that administrative commitments are insufficient to ensure transparency and insist on legal binding measures. This led to the DHS funding being extended only for 2 weeks until February 13.