Jobs Data Blackout to Muddy Bitcoin's Macro Read as U.S. Shutdown Comes to a Close
The U.S. government shutdown has disrupted the release of critical October inflation and jobs data, leaving financial markets, including Bitcoin, in uncertainty. The delay complicates Federal Reserve decision-making, with analysts noting the elevated importance of upcoming data. Bitcoin's price has declined, reflecting the uncertainty. A bill to reopen the government has been signed, but the lack of data raises concerns about future market sentiment and Federal Reserve policy, which may now take on a risk-management approach. December interest rate cut expectations have also diminished amid this uncertainty.
Layer-1
Critical Data Omitted: Implications for Financial Markets
Bitcoin and the broader financial markets are flying blind after the White House confirmed that October’s critical inflation and jobs data will likely not be released. This creates a macro overhang and further complicates the Federal Reserve's policy decisions for the year. White House press secretary Karoline Leavitt reportedly stated, "The Democrats may have permanently damaged the Federal Statistical system with October CPI and jobs reports likely never being released."
Government Shutdown and its Role in the Crisis
The White House attributed this issue to the longest-running U.S. government shutdown in its 236-year history. Democrats had pushed for an extension to tax credits expiring at year-end—an effort aimed at reducing costs for millions of Americans relying on health coverage. Late Wednesday, the House passed a bill to reopen the Federal government after the Senate voted to approve the measure earlier in the week. This bill was subsequently signed by President Donald Trump, ending the shutdown.
Impact on Markets and Bitcoin Performance
Despite the government reopening, the jobs data blackout has altered the broader market landscape. According to Adam Chu, chief researcher at GreeksLive, the delay is “amplifying the importance and uncertainty surrounding the next release, as it grants the data agency greater maneuvering room.”
Meanwhile, Bitcoin's performance has reflected the growing uncertainty. The cryptocurrency is down 1.1% over the past 24 hours, trading at $102,100 as per CoinGecko data, and extending a 10% drop over the past week. Prediction markets, such as Myriad, have seen users temper bullish expectations—Bitcoin's chance of hitting $115,000 before $85,000 fell from 61.4% to 58.8% in just one day.
Doubt Cast on Federal Reserve’s Interest Rate Policy
The prolonged uncertainty has also cast doubt on a potential December interest rate cut, previously highlighted by analysts as critical for shaping market expectations. Chu noted, "December rate futures now price in a 50% probability of a 25-basis-point cut," which is a significant drop from prior consensus. The shift complicates the Federal Reserve's ability to set an effective monetary policy.
Future Challenges for Policymakers and the Market
The absence of October’s lost data has created new challenges, flipping the script entirely. Analysts predict that trading will become sentiment-driven, making it difficult for markets to sustain strong upward momentum. For Federal Reserve Chair Jerome Powell, who often emphasizes data-driven decisions, this shift presents additional hurdles.
Economist Sun suggested that "the Fed is likely to shift into a risk-management posture," warning that "an overly hawkish stance could amplify vulnerabilities and raise the probability of a policy misstep."