Uncertainty Drivers: Tariffs On Canada Or Government Shutdown?

Economic Policy Uncertainty spikes on Sunday.
 

Figure 1: EPU (blue, left scale), seven day centered moving average (red, left scale), and Trade Policy Uncertainty (green, right scale). Source: policyuncertainty.com and Caldara et al. TPU, and author’s calculations.
 

I think it’s mostly attributable to the uncertainty surrounding a end-of-month Federal government shutdown. Prediction markets showed a big jump in the likelihood of a shutdown on Saturday.
 

Source: Kalshi, accessed 1/25/2026, 9:30pm CT.

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