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Every quarter, RIA Washington Watch brings you the most up-to-date information on registered investment advisor news and policy changes to help your firm make informed decisions.

This report is current as of November 24, 2025

The nation's capital is back up to full speed after the longest government shutdown in U.S. history, but the ramifications of the bitter stalemate will linger on. Lawmakers are working now to pass the appropriations bills to fund government operations for the remainder of the fiscal year. Regulators like the SEC saw their agendas stalled during the shutdown and will be racing to dig out from a backlog of requests. Meanwhile, the Supreme Court is poised to rule on two cases with big implications for the markets—one on tariffs and one on the Federal Reserve. Here are some of the key issues advisors should be keeping an eye on as 2025 winds down.

Government shutdown fallout

Congress reached a deal on November 12 to re-open the government after the 43-day standoff. The deal temporarily funds all government functions only through January 30, 2026, raising the possibility of a second shutdown early next year. Lawmakers will be focused between now and then on passing the underlying appropriations bills that fund every federal agency and program for the remainder of the fiscal year, which runs until September 30. The re-opening agreement did include three of the 12 full-year funding bills—those for Agriculture, Military Construction and Veterans Affairs, and the Legislative Branch. Now Congress is trying to put together a package of four or five more spending bills, including the largest: Defense. Passage of a second set of funding bills would go a long way toward averting a partial shutdown in January.

For investors—and the Federal Reserve—the most significant lingering effect of the shutdown is likely to be the lack of economic data. While the September jobs report was released in mid-November, there won't be a traditional October jobs report, marking the first time in 77 years there will be a month without an unemployment rate. Other economic reports will be delayed and could be based on partial information or estimates. Economists believe it's likely to be January before a full picture of the state of the economy is available.

That will make things difficult for the Federal Reserve as it heads into its last monetary policy meeting of the year on December 9–10. After the 25-basis-point interest rate cut in late October, Fed Chair Jerome Powell said that another rate cut in December was "not a foregone conclusion, far from it." Comments by Fed governors in November revealed a deepening divide between those who favor a cut and those who favor holding the rate steady. Market expectations of a rate cut in December have plummeted amid real uncertainty about what the Fed will do.

Two giant Supreme Court cases to watch

On November 5, the Supreme Court heard more than two and a half hours of oral arguments in a case that could have profound implications for the president's tariff policy, the economy, and global trade. The case focuses on whether the president improperly used a 1970s law, the International Emergency Economic Powers Act (IEEPA), to impose the "reciprocal" tariffs on imports from about a hundred countries, as well as some of the tariffs on imports from Canada, China, and Mexico. A lower court ruled last May that the president had exceeded his authority, and an appeals court upheld that decision in August. Now the tariffs are in the hands of the Supreme Court, which sounded skeptical of the administration's position during oral arguments. A decision could come as soon as December, but is more likely to be handed down in early 2026.

A ruling against the administration would upend tariff policy and potentially trigger a complicated refund process of more than $100 billion in tariffs paid to date. But it doesn't mean tariffs are going away. The president has other tools for imposing tariffs that he could use, including an emergency provision to impose 15% tariffs for 150 days. And the sector-specific and product-specific tariffs currently in place on steel, aluminum, copper, cars, pharmaceuticals, furniture and other products followed a proper process; those aren't part of the court case and will continue regardless of what the court decides.

Investors will also be keeping an eye on a second Supreme Court case, one with major implications for Fed independence. The court will hear oral arguments on January 21 on President Trump's unprecedented attempt to fire a sitting Fed governor, Lisa Cook. Two lower courts have allowed Cook to stay in her role as one of seven Fed governors while the case plays out. But if the court rules that Cook can be fired, it would mean the end to more than a century of a clear line of separation between the central bank and the White House.

Tax changes coming—and some are already here

Advisors should be thinking now about how the tax code changes from last summer's "One Big Beautiful Bill Act" will impact clients. Several high-profile tax cuts are effective for the current tax year, including no taxes on tip income, no taxes on overtime hours, deduction of interest paid on auto loans, and the special $6,000 deduction for seniors 65 and up, which applies to both itemizers and non-itemizers. All four of those provisions have income caps and other restrictions.

In 2026, we will see the increased exemption amount for the estate tax kick in, rising to $15 million per person, a key for estate planning. But one under-the-radar change to the tax code next year merits planning before the end of 2025. That's the new floor for receiving a deduction for charitable contributions by individuals who itemize their deductions. Starting next year, that floor will be 0.5% of adjusted gross income, meaning an individual who earns $100,000 and donates $1,000 to a charity will only receive a $500 deduction. Higher earners may want to consider accelerating their charitable donations before the end of 2025 to preserve the full deduction. Bunching charitable donations and other strategies may warrant consideration in 2026 and beyond.

Regulatory outlook for RIAs

The government shutdown has left the SEC in scramble mode as 2025 winds down. The agency operated with a skeleton staff during the shutdown, as only about 9% of employees were deemed essential to market surveillance. That has left a huge backlog across the agency, impacting things like new advisor registrations. Catching up will likely extend into the new year.

The shutdown also resulted in a pause on the SEC's regulatory activity. SEC Chairman Paul Atkins is focused on reducing the regulatory burden for market participants, including advisors. Last summer, the agency formally repealed more than a dozen rule proposals put forward by the previous chairman, Gary Gensler, including ESG and artificial intelligence rules, the outsourcing and cybersecurity rules for RIAs, and the revised Custody Rule. The agency is expected to propose a new version of the Custody Rule in 2026, including clarifications on how custodians should handle cryptocurrency assets.

The Treasury Department, as it announced last summer, formally proposed a two-year delay in the anti–money laundering rule for RIAs, which was set to go into effect this January. The new effective date will be January 1, 2028, but it is widely expected that the rule will be modified and rewritten. In a related development, the SEC has on its 2026 agenda revisions to the Customer Identification Program (CIP).

Finally, an update on the fiduciary rule. Two courts have stayed the 2024 Retirement Security Rule and appear poised to throw it out entirely, though settlement negotiations are ongoing. It's unclear what steps the Department of Labor will take next. It could rescind the rule and start over or try to rewrite the 2024 rule. Either way, the definition of fiduciary in the retirement savings context remains on the agency's regulatory priorities list with the aim of issuing a new proposal next year, ensuring that the 15-year saga of trying to rewrite the fiduciary rule will extend into 2026 and likely beyond.