For the first time in more than a century, the United States is about to ignore its inflation statistics. With Bureau of Labor Statistics staff laid off due to the shutdown, there will be no consumer price index or official measure of the cost of living, nor a baseline for the markets.
What the devil? So will the CPI report under Trump be all smoke and mirrors? This comes at a time when many argue that the CPI is rigged in the United States, as well as in the banana republics.
Anyone who pays household bills can see cost inflation in real time, and it’s well over 3%. Economists and traders are now sailing blind, improvising where the world’s most followed inflation gauge used to be.
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CPI Inflation Statistics: Is America Screwed?
“There is practically NO INFLATION,” says the billionaire politician who hasn’t had to shop in regular stores for decades.
Just as Biden lied, Trump lies. pic.twitter.com/innsKZL1K2
– An0maly (@LegendaryEnergy) October 6, 2025
We are currently observing in real time a classic political error from the last cycle:
- Interest Rates and the Federal Reserve: The Federal Reserve has begun to cut, bringing the target range to 4.00-4.25% starting in September. They are entering a slowdown, terrified by the cracks forming in employment.
- Inflation (The sticky tail): The September CPI rose to 3.0% (general and underlying). The “last mile” towards 2% has failed. The Federal Reserve is easing policy as inflation accelerates again, a disastrous scenario for real bond yields and stock valuations.
- The yield curve signal: The 10Y-2Y differential is now positive (+0.54%). History shows that recession begins after the curve deinverts.
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Meanwhile, for more than a century, the CPI has tracked every rise and fall in the cost of living without interruption. That record ends this month. The fact that government statisticians are laid off and no new data has been collected is adding more pressure to an already stressful US economic environment.
“Without timely inflation data, households can’t budget, businesses can’t plan and investors essentially operate on fiction,” said Jon Hill, head of US inflation strategy at Barclays.
Now that the CPI is gone, what’s next? The problem of “setbacks”
Without CPI data to anchor markets, two alternative systems have taken their place and do not match. The US Treasury assumes that inflation will continue at the average pace of last year.
The ISDA, which regulates swaps, froze inflation at last October’s level: 3.01%.
The result is a deformed market. Barclays estimates that the split now implies a breakeven rate of 3.05% for TIPS versus just 1.78% for inflation swaps, and this is a chasm wide enough to break models that once moved in sync.
For cryptocurrency traders, this is a break in one of the world’s leading pricing systems.
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Prediction markets are not optimistic. Polymarket contracts give less than 30% chance of CPI data falling before November.
Without the CPI, the Federal Reserve goes into its October meeting half-blind. Bond auctions are at risk of distortions and macroeconomic models could start to give false signals.
If the shutdown drags on, the divide between TIPS and swaps could widen further, bending the yield curve and leaving economists guessing what’s really going on.
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Key takeaways
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For the first time in more than a century, the United States is about to ignore its inflation statistics. With the Bureau of Labor Statistics suspended.
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If the shutdown drags on, the split between TIPS and swaps could widen further, bending the yield curve.
The post US Inflation Stat Faces Chaos as Government Shutdown Freezes BLS Data appeared first on 99Bitcoins.
