Morning from Copenhagen.

We’ve gotten a breather from the tariff headlines (for now) as the game plan seems more or less locked, with markets desperately looking forward to April 2, when the tariff debacle will likely be concluded. However, just as everyone thought we might get a few days without major headlines, a government shutdown is back on the table—probably the last thing markets need right now. This raises the question: Where is Trump’s pain level in equities? And does it even exist?

Democrats are trying to block the GOP spending bill, which includes reductions in IRS funding, further support for Elon’s DOGE project, and more immigration-related funding—areas where Democrats want different outcomes. In the Senate, they currently have the upper hand, as Trump will need eight Democrats to vote for the bill—which so far has only passed in the House.

U.S. risk assets are down slightly this morning as markets remain exhausted by the constant swirl of bad news and new issues. The bill will likely pass in the Senate, and we will avoid a government shutdown—that’s at least the base case (though I wouldn’t bet against Trump testing the limits). But the fact that we’ve ended up in this situation at all speaks volumes about Trump’s unusual approach to political maneuvering. However, if the Democrats successfully constrain the DOGE project enough in the bill, it might actually be a net positive for risk assets, as a more gradual implementation would be far better from a macro perspective than doing it all at once.

Our estimates of the daily fiscal deficit show that Trump has struggled to bring the deficit down since inauguration, which might explain why he is so eager to get this spending (cutting) bill through the Senate.

Chart 1: The Deficit Is Not Moving in the Right Direction for Trump