The US government shutdown in late 2025 has halted the release of critical inflation data from the Bureau of Labor Statistics (BLS), including the Consumer Price Index (CPI), marking the first such interruption in over a century. This freeze disrupts macroeconomic data flow, creating widespread uncertainty and volatility in financial markets, particularly affecting cryptocurrency sectors sensitive to US economic indicators.
According to Phillip L. Swagel, Director of the Congressional Budget Office, the shutdown could reduce annualized real GDP growth by 1.0 to 2.0 percentage points, depending on its duration. The Federal Reserve has been cutting interest rates, with the target range at 4.00-4.25% as of September, while inflation ticked up to 3.0% in September, indicating a re-acceleration that complicates monetary policy.
Historically, similar shutdowns in 2018-19 delayed data releases and led to heightened market volatility, with crypto-assets like BTC and ETH exhibiting price surges due to speculation. Jon Hill, head of U.S. inflation strategy at Barclays, emphasized that without timely data, investors are essentially trading on fiction, as fallback systems from the US Treasury and ISDA create discrepancies, such as a 3.05% breakeven rate for TIPS versus 1.78% for inflation swaps.
Prediction markets on Polymarket give less than a 30% chance that CPI data resumes before November, exacerbating market distortions and leaving the Fed and traders navigating blind amid potential yield curve twists.
MIM
LTC
ZK