US govt shutdown may prompt first-ever inflation bond workaround


Fiscal standoff: The US Federal Reserve building in Washington. The White House warns there will likely be no inflation data published next month, which means the BLS’ October CPI report scheduled for Nov 13 won’t be released. — Reuters

WITH the US government shutdown threatening to freeze October’s inflation report, the Treasury is expected to deploy a workaround to compute the index underpinning the US$2.1 trillion market for inflation-protected bonds for the first time since their 1997 launch, a move that may cause pricing quirks as traders adjust their calculations.

The Bureau of Labour Statistics has said it has halted all data collection and publishing during the shutdown, apart from recalling staff to deliver September’s consumer price index (CPI), released last Friday.

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