CPI It falls to 2.6% in the middle of the data blackout – Miracle or Statistical Mirage?

Igor Pereira · December 18, 2025

The financial market has just received the most confusing and potentially explosive inflation report in recent years. The CPI Center (CPI Core) of the USA dropped unexpectedly to 2.6%, the lowest level since March 2021. At first glance, it seems the final victory of the Federal Reserve. However, when we opened the "black box" of the report, we discovered that this number was drastically affected by the US government's shutdown.

By Igor Pereira Financial Market Analyst

Below, I explain what really happened and how to operate in this uncertainty scenario.

1. The Black Hole of October

The key to understanding that number is last month. Due to the "lapse in appropriations" (lack of funds) that caused the government to shut down between October 1st and November 12th, 2025, the Bureau of Labor Statistics (BLS) did not collect inflation data in October.

The consequence: The October report was cancelled. To calculate the November data (today), the BLS had to make massive assumptions to fill the October void.
The "Magic" of Housing: The BLS has assumed inflation of 0% for the housing sector (Shelter) in October. As a result, we saw the largest two-month net drop in rent inflation since the pandemic. This pulled the general index down artificially.

2. Real Data vs. Assumptions

Despite the statistical distortion, there are real trends of disinflation occurring, which gives some credit to the number:

Oil in Free Fall: Oil prices have reached a minimum since February 2021, dropping about $25 per barrel since the presidential inauguration. Political pressure for gasoline below $200 continues to take effect.
Unemployment in Upper: Unemployment has risen to 4.6%, the largest since 2021. This confirms that the real economy is cooling, which justifies lower interest rates.

3. The Fed Dilemma and Market Reaction

The market is reacting with caution, but with optimistic bias for interest cuts.

Probability of Cut: The bets of a 25bps cut at the January 28 meeting rose to 28%.
The Danger: Investors hate uncertainty. The fact that October data is an "estimate" and not a real data means that the Fed is flying partially blind.

Don't get carried away by the euphoria of the number "2.6%" alone.

For Dollar (DXY): The immediate tendency is weakness, because the market focuses on the headline "low inflation".
For Gold (XAU/USD): We have disinflation (which the market likes) mixed with institutional uncertainty (shutdown/lack of data) and rising unemployment. This usually drives Gold as a refuge.

Stay tuned: The speeches of Fed members in the next few hours will be crucial. If they validate this data as "sufficient", the year-end rally is confirmed. If you show skepticism with the post-shutdown methodology, the volatility will go off.

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