With a potential government shutdown looming for January 19th, President Trump and Congress are maneuvering to reach an agreement on immigration in order to keep the government running. The President made an unusual move in conducting open door negotiations between Republicans and Democrats, which made it more obvious that some progress appears to be happening. One crucial shift is to focus away from a complete immigration overhaul and to focus instead on dealing with the most pressing issues.
In particular, the President focused attention on replacing DACA, tightening border security, and building a border wall. He also focused on ending the visa lottery system. However, more comprehensive reforms would be pushed back for later. In the end, it seems that any agreement that can be reached would have to come along these lines, and the President has essentially agreed to sign any legislation that Congress decides on, thus focusing the burden on Congress. Ultimately, this seemed to be his intention all along, but it remains to be seen if this strategy will succeed in avoiding a shutdown and reaching a reasonable compromise. The markets should react positively to an agreement being reached, but it is doubtful that the impact will be large.