U.S. Government Shutdown May Halt Key Economic Data Releases

The October non-farm payroll and inflation data may remain unpublished due to the ongoing U.S. government shutdown, causing uncertainty for policymakers and markets. The White House suggests economic growth could be reduced by up to 2 percentage points.

This situation is significant due to its impact on economic policy and cryptocurrency market uncertainty.

The White House has expressed concerns over the “permanent damage” that might occur without the release of October economic data. Karoline Leavitt emphasized that the Federal Reserve could be left to “fly blind” without these statistics. She stated:

Democrats may have permanently damaged the federal statistical system, and the October CPI and (non-farm) jobs reports are very likely to never be released. The release of all these economic data will be permanently damaged, forcing Federal Reserve policymakers to ‘fly blind’ during a critical period.

This is considered unprecedented as multiple shutdowns previously caused data delays but never permanent cancellations.

The decision involves top government officials, including Karoline Leavitt and Kevin Hassett. Hassett acknowledged that some surveys were never completed, leading to the unavailability of key statistics. Without these data points, markets face heightened volatility and uncertainty regarding Federal Reserve actions and policies.

Markets’ Reaction

Markets such as cryptocurrency have reacted to this uncertainty, with notable fluctuations in major assets like BTC and ETH. These impacts are felt due to their role as macro proxies affected by economic volatility and rate policy changes. Financial predictions estimate a 2 percentage point hit to Q4 growth.

Potential outcomes include financial instability in crypto markets and broader economic implications due to disrupted risk models and treasury management strategies in decentralized finance systems. Historical trends reveal no direct precedent, adding to the complexity and uncertainty facing regulators and investors alike.