December 18, 2025

The November CPI Print Is Probably Fiction, And Crypto Traders Should Care

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This morning, the Bureau of Labor Statistics released November's Consumer Price Index, showing headline inflation at 2.7% year-over-year and core CPI at 2.6%, the lowest readings since March 2021. Markets rallied. Algorithms bought the beat. Risk assets caught a bid.

There's just one problem: almost nobody believes the numbers are real.

I'm not usually one for conspiracy theories about government data. But when the Fed Chair himself tells markets to view inflation figures with a "somewhat skeptical eye," when shelter costs allegedly went flat for two months, and when the data collection process was fundamentally broken by the longest government shutdown in American history, it's worth asking what we're actually trading on.

The Numbers That Don't Add Up

Let's start with what the BLS reported. Headline CPI came in at 2.7% against expectations of 3.1%. Core CPI hit 2.6% versus the 3.0% consensus. On a two-month basis (September to November, since October was never collected), prices rose just 0.2%, implying roughly 0.1% monthly readings for both October and November.

For context, September showed 0.3% monthly inflation. We're supposed to believe that inflation suddenly collapsed to one-third of that rate during the two months nobody was measuring it.

The shelter component, which comprises 36% of CPI and has been the primary driver of sticky inflation for years, showed only 0.2% growth over two months. That's essentially zero. RSM's Chief Economist Joe Brusuelas didn't mince words: "That just doesn't look or feel right. That just doesn't pass the smell test."

And he would be right, it doesn't.

What Actually Happened to the Data

The 43-day government shutdown that ended on November 12 wasn't just a political story. It was a statistical catastrophe. Here's what the BLS couldn't do:

October data was never collected. Two-thirds of CPI prices are gathered in person by field workers who visit stores, supermarkets, and service providers. Those workers were furloughed. The October CPI release was cancelled entirely, the first time that's happened in the modern era of the index.

November collection started late. Data gathering didn't begin until November 14, meaning only the back half of the month was captured. Goldman Sachs warned before the release that "collecting prices only in the second half of the month could bias prices lower because goods prices typically decline sharply starting around the middle of November as the holiday sales season kicks off."

The methodology was compromised. According to the BLS's own documentation, they "carried forward" September data to October because they couldn't collect it. Then they measured November against that fiction. The agency admits it's "researching how the missing October 2025 data for rent and OER will affect the 6-month change for April 2026 data." They don't even know how broken their own numbers are yet.

As the Friends of the Bureau of Labor Statistics noted, "October 2025 will permanently remain a partial blind spot in America's official record."

The Disconnect From Reality

If inflation really dropped to 2.6% core, somebody forgot to tell my grocery store.

The same BLS report that showed benign headline numbers revealed meat prices up 8.9% year-over-year, the highest since 2022. Ground beef is up 14.9%. Coffee has climbed 18.8%. And eggs? Earlier this year, prices hit $8.15 per dozen, representing a 53% year-over-year increase at their peak.

Heather Long, Chief Economist at Navy Federal Credit Union, captured what most Americans are feeling: "Inflation did not suddenly improve a lot between September and November. Anyone who has been to the grocery store or paid a utility bill knows this."

The cognitive dissonance between the CPI print and lived experience is a credibility problem for policymakers making trillion-dollar decisions based on these figures.

What the Smart Money Is Saying

The skepticism isn't coming from fringe voices; it's coming from the institutions that move markets.

Fed Chair Jerome Powell (last week): The central bank would need to look at the data with a "somewhat skeptical eye."

Morgan Stanley: "Difficult to draw strong conclusions from the report... inflation could see reacceleration in December."

Goldman Sachs Asset Management: "Today's low inflation reading won't move the needle for the Fed given how noisy the data is. The Fed will instead focus on the December CPI released in mid-January."

UBS: "We suggest paying little attention to what is published [for November] because it will be based on less information than usual."

Wolfe Research: "I don't take it at face value. It seems like the government shutdown had a big impact."

When Goldman tells you to ignore a data release, that's not bearish commentary. That's the institutional consensus that the numbers are unreliable.

The December Reacceleration Risk

Here's where it gets interesting for traders.

Morgan Stanley explicitly warned that "given the way the BLS processed the report without October data, inflation could see reacceleration in December." This isn't speculation. It's mechanical. If November's print was artificially suppressed by Black Friday timing, incomplete shelter data, and methodological compromises, December's reading against that base will look hotter by comparison.

December CPI drops on January 13, 2026, just two weeks before the Fed's January 29 meeting. That's the number that matters. Goldman has already said the Fed will treat December, not November, as "a more accurate bellwether for inflation."

If December shows core inflation back at 3.0-3.2%, the narrative flips entirely. The market will realize November was noise, not a signal. Rate cut expectations get repriced. The dollar strengthens. Risk assets, including crypto, face headwinds.

What This Means for Crypto

The derivatives market is already flashing caution signals, and today's soft CPI print doesn't change the underlying structure.

In our Digital Asset Snapshot this week, we documented a market at an inflection point. BTC declined 4.7% to $86,374 while ETH underperformed at -5.3% to $2,963. The altcoin complex amplified losses across the board: UNI -9.6%, AVAX -9.5%, DOGE -8.9%, XRP -8.7%.

But positioning tells a different story. Open interest rose 1.5% to $76.28B even as prices fell. Long/short ratios expanded with BTC at 2.03x and ETH at 2.17x, indicating traders are accumulating into weakness rather than capitulating. This OI/price divergence creates binary risk: either dip-buyers are proven right, or a break of $85k support triggers a liquidation cascade from newly established longs.

The term structure is particularly telling. As Greg Magadini detailed in this week's derivatives newsletter, the Fed's hawkish tone has compressed crypto basis across the board. BTC's 7-day APR sits at 5.44%, with the 30-day at 3.99% and the 90-day at just 3.67%. These levels are well below November's highs when 7-day APRs exceeded 15%. The carry trade economics that attracted institutional capital are becoming unattractive.

SOL positioning represents the most crowded trade in the market right now. The long/short ratio hit 4.10x, the highest across all tracked assets. At 4:1 longs to shorts, any downside catalyst risks triggering cascade liquidations. DOGE (2.98x) and BNB (3.46x) also show elevated long bias.

Today's CPI "beat" gave crypto a brief lift, with Bitcoin pushing toward $88,000 before retreating. But the rally was underwhelming and quickly faded. That price action tells you something: the market isn't fully buying the inflation-is-solved narrative.

The Institutional Flow Picture

Bitcoin ETFs provide another lens on institutional sentiment. We recorded +$246.5M in net inflows over the past 7 days, breaking the recent selling pattern. However, the 30-day trend remains deeply negative at -$1.73B. Fidelity led weekly inflows at +$167.3M, followed by BlackRock at +$106.1M.

The interesting detail: BlackRock's +$106.1M weekly inflow contrasts sharply with its -$1.65B 30-day outflow. The timing suggests recent dip-buying after November's distribution phase. But this is tentative buying interest, not sustained accumulation.

Stablecoin flows tell a similar story of caution. Total supply sits at $271.3B with -$59.1M in net burns over 7 days. USDT maintains dominance at $184.6B with +$75.0M weekly mints, while USDC saw -$111.6M weekly outflows. Capital is rotating to safety within the stablecoin complex, with DeFi-native stablecoins under pressure (USDe -$158.9M weekly, FDUSD -$225.8M).

The Fed's Dilemma

The Fed just cut rates by 25bps last week, but as Greg noted in his analysis, the central bank is stuck between its dual mandates. The employment situation is softening at a surprisingly resilient rate, which would normally lean the Fed toward continued rate cuts. But inflation remains above target. The most recent PCE numbers came in at +2.8% y/y versus the Fed's target of +2.0%.

Now we have a November CPI print that suggests inflation has collapsed to 2.6% core. If that number were real, it would validate the Fed's cutting cycle. But the data is compromised. And if December's report shows reacceleration, as Morgan Stanley warned, the Fed will look foolish for easing policy based on unreliable statistics.

The December CPI release on January 13 lands just two weeks before the January 29 FOMC meeting. That's the number that will drive policy decisions, not this morning's fiction.

The Bottom Line

I'm not arguing that inflation is out of control or that the Fed has made catastrophic errors. What I'm arguing is simpler: the November CPI print is not a reliable data point, and trading decisions based on it are built on sand.

The shutdown broke the data collection process. The BLS has been transparent about the limitations. The Fed itself has signaled skepticism. And the real-world experience of American consumers, paying elevated prices for groceries and watching their bills climb, doesn't match a 2.6% core reading.

For crypto traders, the implication is straightforward: don't get complacent on this "soft" inflation print. The December number, released January 13, is the one that matters. Between now and then, we're trading in a fog of unreliable macro data, compressed basis, and elevated positioning risk.

The market structure we track at Amberdata suggests this isn't the time for aggressive long exposure. BTC basis compressed to under 4% from 15%+ in November. SOL crowding at 4.1x long/short represents asymmetric downside risk. Open interest building into price weakness creates liquidation fuel. And $85k BTC support sits just 1.6% below current levels.

Our forward outlook from this week's Digital Asset Snapshot: the market is at an inflection point. ETF buying is resuming and depth is improving, but ETH and XRP remain in backwardation while 30-day ETF trends stay negative. The key level is $85k BTC. Current regime: consolidation with elevated short-term risk until positioning clears or a catalyst emerges.

Sometimes the most important analysis is knowing when the data can't be trusted. This is one of those times.

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Michael Marshall

Mike Marshall is Head of Research at Amberdata. He leads pioneering research initiatives at the forefront of blockchain and cryptocurrency analytics. Mike is a seasoned quantitative analyst with a 15-year track record in developing AI-driven trading algorithms and pioneering proprietary cryptocurrency strategies. His...