Core Viewpoint - The article discusses the potential risks associated with a possible U.S. government shutdown, highlighting three main "invisible risks" that could impact economic growth, data release interruptions, and specific financial instruments [1][2]. Economic Impact - A comprehensive government shutdown could lead to approximately 800,000 federal employees being furloughed, resulting in a weekly reduction of about 0.2 percentage points in annualized real GDP growth [2][7]. - The previous shutdown in October 2013 caused a decline of $8 billion in actual federal consumption expenditures, which ultimately reduced the fourth-quarter GDP growth by 30 basis points (0.3%) [7]. Data Release Interruption - The shutdown may delay the release of critical economic data such as employment reports and the Consumer Price Index (CPI), creating a "data black hole" for the Federal Reserve and market participants [4][5]. - Historical data from the 2013 shutdown indicates that the employment and CPI data releases were significantly delayed, leading to a chaotic data release schedule [4][6]. Financial Instruments Impact - The delay in CPI data could affect inflation-protected securities (TIPS) and inflation swaps. If the September CPI report is not released on time, the U.S. Treasury will use a fallback index based on the most recent available changes to calculate TIPS payment obligations [10][11]. - For inflation swaps, if the final data is released more than five business days after the payment date, actual data will be used; otherwise, a similar fallback method will apply [11]. Absence of Default Risk - Unlike the 2013 crisis, the current budget impasse does not involve a debt ceiling issue, which significantly reduces the risk of a systemic financial crisis due to government default [3][9].

Core Insights - The potential government shutdown in the U.S. poses "invisible risks" to economic growth, key economic data, and specific financial instruments, although it does not present a systemic risk of default as seen in 2013 [1][2][8] Economic Impact - A comprehensive government shutdown could lead to 800,000 federal employees being furloughed, resulting in a weekly reduction of approximately 0.2 percentage points in annualized real GDP growth [1][5] - The previous shutdown in 2013 resulted in a $8 billion decline in annualized federal consumption expenditure, which ultimately reduced the fourth-quarter GDP growth by 30 basis points (0.3%) [5] - Even without a shutdown, federal government spending has already been a drag on GDP growth, contributing to an average reduction of about 40 basis points for the first half of 2025 [7] Data Release Delays - The shutdown would delay the release of critical economic data such as employment reports and the Consumer Price Index (CPI), as employees from the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS) may be furloughed [3][4] - Historical data from the 2013 shutdown indicates that the release of employment and CPI data was significantly delayed, leading to a chaotic data release schedule [3][4] Financial Instruments Impact - The delay in CPI data will have specific implications for financial instruments such as Treasury Inflation-Protected Securities (TIPS) and inflation swaps, affecting their valuation and cash flows [9][11] - TIPS payments will be calculated using a backup index based on the most recent annualized inflation rate if the September CPI report is not released on time [11] - Inflation swaps will follow a different protocol, using actual data if released within five business days of the payment date; otherwise, a backup calculation will be employed [11]