US Inflation Statistics Encounter Disorder as Government Shutdown Halts BLS Data

For the first time in over a hundred years, the United States is poised to experience a blackout on its inflation statistics. With employees from the Bureau of Labor Statistics on furlough due to the shutdown, there will be no Consumer Price Index or official cost of living measurement, leaving the markets without a fundamental baseline.

What in the world? So the CPI report under Trump will just be illusions? This situation arises when many are claiming that the CPI is manipulated in the US, similar to practices in Banana republics.

Anyone who handles household expenses can observe the inflation in costs firsthand, and it far exceeds 3%. Economists and traders are now operating without guidance, improvising in the absence of the world’s most-observed inflation indicator.

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CPI Inflation Data: Is The US in Trouble?

“virtually NO INFLATION” states the billionaire politician who hasn’t shopped at regular stores in decades.

Just as Biden was untruthful, so is Trump. pic.twitter.com/innsKZL1K2

— An0maly (@LegendaryEnergy) October 6, 2025

We are currently witnessing a typical late-cycle policy blunder in real-time:

• Interest Rates & The Fed: The Fed has initiated cuts, reducing the target range to 4.00-4.25% as of September. They are cutting into a slowdown, apprehensive about the fragilities emerging in employment.
• Inflation (The Persistent Issue): September CPI increased to 3.0% (both headline and core). The journey to reach 2% has faltered. The Fed is easing while inflation is picking up again, creating a disastrous scenario for bond real yields and equity valuations.
• The Yield Curve Signal: The 10Y-2Y spread is now positive (+0.54%). Historical trends indicate a recession begins after the curve dis-inverts.

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Meanwhile, the CPI has consistently tracked every increase and decrease in living costs for over a century. That ledger concludes this month. With government statisticians furloughed and no new data being gathered, this is adding extra strain to an already tense US economic landscape.

“Without timely inflation data, families can’t budget, businesses can’t strategize, and investors are essentially trading based on fiction,” remarked Jon Hill, head of U.S. inflation strategy at Barclays.

With CPI Disappeared, What Lies Ahead? The Issue with the “Fallbacks”

In the absence of CPI data to ground the markets, two alternative frameworks have emerged, which do not align. The US Treasury presumes inflation will persist at the average rate of the previous year.

The ISDA, governing swaps, has frozen inflation at last October’s level: 3.01%.

The outcome is a distorted crypto market. Barclays estimates that this discrepancy currently suggests a 3.05% breakeven rate for TIPS compared to just 1.78% for inflation swaps, creating a divide significant enough to disrupt models that once operated in unison.

For crypto traders, this represents a fracture in one of the world’s fundamental pricing systems.

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Prediction markets do not exude optimism. Contracts on Polymarket give less than a 30% probability that CPI data will be released before November.

Without CPI, the Fed enters its October meeting somewhat blind. Bond auctions face the risk of distortion, and macroeconomic models might begin generating inaccurate signals.

If the shutdown persists, the gulf between TIPS and swaps could further widen, twisting the yield curve and leaving economists uncertain about what’s truly happening.

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