The government shutdown has entered a new phase. Both sides are still digging in, and neither is blinking. Stare at the market long enough, and you start seeing what you want to see. The same goes for Washington: both sides see only the other’s mistakes. Schumer and Trump are talking past each other, and the shutdown drags on. What markets fear most isn’t bad news—it’s endless uncertainty. Who will crack first? I’m guessing we’ll know within two weeks. I’ll bet a pack of spicy snack strips on it.

Washington has staged this kind of “who blinks first” showdown before. From late 2018 to early 2019, a standoff over funding for a border wall shut down the federal government for more than a month—35 days in all. Around 800,000 federal employees either worked without pay or were furloughed. The Congressional Budget Office later estimated that the shutdown cost the economy about $11 billion, including roughly $3 billion in permanent losses that could never be recovered. Long lines at airport security, piles of garbage in national parks, and delays in food safety inspections were all over the news at the time. But even with the cost right in front of them, both sides were busy proving that “the other side was to blame.” The 16-day shutdown in 2013 was similar. S&P estimated that it shaved about 0.6 percentage points off GDP that quarter, costing roughly $24 billion. Those are substantial numbers, but in political narratives, they’re often compressed into one line: “The other side refused to compromise.”

This time is much the same. Schumer and Trump are talking past each other: one says the other is using the government’s operations as leverage, while the other says their opponent refuses to address border security. Both sides are appealing to their own voters. It sounds like they’re speaking in the same room, but in reality, they’re each holding their own meeting. The shutdown keeps grinding on, wearing down not only federal employees’ patience, but also the market’s confidence in “predictability.” During the standoff in December 2018, the S&P 500 fell nearly 9% in a single month, and the VIX volatility index briefly surged to around 36. It wasn’t that any one piece of bad news was especially devastating; it was that people woke up every day not knowing whether the next day would be worse. Companies delayed investment, consumers cut back on spending, and credit-rating agencies began warning about governance risks. Those reactions often linger longer and cost more than the shutdown itself.

That’s why what markets fear most isn’t bad news—it’s endless uncertainty. Bad news can be priced in, hedged against, and weathered. But a cycle of “talks fall apart today, resume tomorrow, and continue the day after” pushes every decision further down the road. Stare at the market long enough, and you start seeing what you want to see: bulls focus on the hope that the government will reopen, while bears focus on the details of every failed negotiation. Washington is no different. Both sides see only the other’s mistakes; the more they look, the more convinced they are that they’re right, and the more convinced they are, the less willing they are to blink first.

Who will crack first? I’m guessing we’ll know within two weeks. The reasons are straightforward: federal employees’ payday, pressure on airport operations, weakening economic data, and shifts in public opinion will all create fresh pain points over the next couple of weeks. And politicians are especially good at finding a way to save face before enough people are hurting. Of course, I could be wrong. In Washington, “two weeks” can sometimes stretch into “next month.” So, I’ll say it again: I’ll bet a pack of spicy snack strips.