Shutdown’s Done. Now What?

[Andrew Postell]

Markets are moving fast as the U.S. government inches toward reopening after a historic 40-day shutdown. Treasuries sold off sharply Monday, with 10-year yields climbing to 4.15% as investors rotated out of safe havens and priced in restored fiscal clarity. The Senate’s procedural vote signaled bipartisan momentum to keep the lights on through January.

The shutdown froze key agencies, delaying CPI, PPI, and jobs data. With operations resuming, markets are bracing for a flood of backlogged releases. Expect a data deluge that could reshape Fed expectations—especially with rate cut odds for December dropping from 90% to 60%.

Despite the GDP hit, investors are refocusing on a resilient economy: earnings are solid, the Fed is sounding dovish, and trade tensions have cooled. Still, fiscal risks linger—especially with Trump floating a $2,000 tariff dividend that could steepen the curve if debt fears resurface.

Mortgage markets remain calm for now: UMBS 5.5s are sharply unchanged. Much more to come throughout the week—even some chatter of 50-year mortgages?!