The US government shutdown crisis has seen some progress: the House of Representatives passed a $1.2 trillion spending bill, injecting key momentum into ending part of the shutdown. However, due to the previous shutdown, the US Department of Labor's January non-farm payroll report and JOLTs job openings were forced to be postponed again. Furthermore, policy differences caused by the immigration enforcement controversy have not been completely resolved, and uncertainties remain.

Spending Bill: Short-Term Relief, Core Disagreements Remain

The $1.2 trillion spending bill approved by the House of Representatives has the core objective of ending the ongoing partial government shutdown.

The bipartisan bill passed on Tuesday by a narrow margin of 217 votes in favor and 214 against. In the Republican-controlled House of Representatives, 21 Republicans voted against the bill, while 21 Democrats voted in favor. This bipartisan support prevented the policy deadlock from escalating and eased market concerns about a government shutdown, providing short-term support for dollar liquidity and the stability of risk assets.

The bill has been submitted to President Donald Trump's desk and is awaiting his signature. Once enacted, it will completely end the previous policy uncertainty.

In terms of funding coverage, the bill restores overdue funding for key federal programs such as the Department of Labor and the Department of Education. At the same time, Congress has completed the drafting of 11 annual appropriations bills, which will provide funding support for most government agencies and programs until September 30, laying a fiscal foundation for the stability of the U.S. economy and financial markets in the second half of the year.

However, the focus of the dispute is on the Department of Homeland Security's (DHS) funding arrangements: the bill only provides short-term funding for two weeks (valid until February 13), which does not resolve the core differences, and subsequent negotiations still face pressure.

(Some right-wing Republican lawmakers attempted to amend the bill to include provisions tightening voting requirements, but were unsuccessful, reflecting the divisions within the Republican Party.)

Root of the controversy: Immigration enforcement incidents ignite partisan divide

The root of this disagreement lies in immigration enforcement. Last month's extreme incident involving federal agents and a U.S. citizen sparked a fierce partisan battle over the authority of Immigration and Customs Enforcement (ICE).

Democrats are pushing hard for new restrictive provisions and regulatory frameworks for ICE agents in the appropriations bill, including banning the wearing of masks, requiring the possession of legal writs, conducting independent investigations when agents break the law, and mandating the use of body cameras. They have made it clear that these reforms must be included in the year-end appropriations bill.

Political Game: The Negotiation Dilemma Under a Fragile Majority

House Republicans hold a slim majority of 218 to 214, meaning that even with a united Democratic opposition, they can only lose one Republican vote at most. This fragile majority means that subsequent fiscal negotiations still face the risk of a stalemate.

House Speaker Mike Johnson is optimistic that the two sides can reach an agreement before the February 13 deadline, and the president has also taken the initiative to communicate. However, Democratic leader Hakim Jeffries' tough stance shows that the differences between the two parties on immigration enforcement reform are difficult to bridge in the short term, which may become a potential obstacle to the renewal of funding for the Department of Homeland Security.

Chain reaction: Non-farm payroll report delayed again, market expectations under pressure.

The U.S. Bureau of Labor Statistics (BLS) officially announced on Monday that the January 2026 non-farm payroll report, originally scheduled for release on February 6 (Friday), will not be released as planned and will have to wait until federal funding resumes before the release date is rescheduled.

Although the data collection for the report has been completed, the shutdown has still caused a delay in its release—this is not an isolated case. The Bureau of Labor Statistics previously encountered serious delays in data release and procedural obstacles during a record 43-day shutdown in October and November last year.

It is worth noting that the US is expected to add only 584,000 jobs in 2025, a sharp drop from 2 million in 2024, marking the worst annual performance since 2020. Market attention to the January data was already high, and this delay has further exacerbated expectations of market volatility after the data release.

Summary: Short-term stability maintained, but long-term uncertainties remain.

Overall, the passage of the $1.2 trillion spending bill temporarily mitigated the risk of an emergency shutdown and injected short-term confidence into the market. However, the short-term funding arrangements for the Department of Homeland Security, the unresolved disagreements on immigration enforcement reform, and the information gap caused by the delayed non-farm payroll report still pose multiple uncertainties to the operation of the US government and the financial markets.

The progress of negotiations between the two parties over the next 10 days, as well as Trump's signing of the bill, need to be closely monitored to avoid policy fluctuations impacting assets such as the US dollar, US stocks, and gold. However, as mentioned in previous articles, the risk of a substantial US government shutdown was eliminated on January 29, so gold has not shown any negative reaction to the government's signed funding agreement.