Markets
|3 min ReadCPI’s “best guesses” shake trust, spark opportunity
Maya Chen
Senior Analyst
Published
Jan 16, 2026
When the benchmark cracks, volatility pays
Smart money is losing faith in the U.S. inflation gauge. That is your edge. When the crowd doubts the data, markets swing. Traders who move first take the spread. Hesitation costs.
Confidence in the Consumer Price Index is fading fast. In August 2025, an estimated 36% of CPI used imputed prices, not observed ones, as highlighted by the Kobeissi Letter and confirmed by Bureau of Labor Statistics (BLS) methodology. In July it was 32%. That is the highest share since the BLS began tracking it. Investors fear noisy prints. They fear policy mistakes. They should.
What changed: more “best guesses” inside CPI
Missing prices are normal. The BLS typically collects about 90,000 quotes each month across roughly 200 categories from field staff in 75 urban areas. When data is absent, statisticians use “different-cell imputation.” They borrow from related items. Historically only about 10% of CPI needed that.
Since the second half of 2024, that reliance blew past 30% and stayed there through 2025. Analysts tie it to post-pandemic collection gaps, shifting consumer behavior, and hard-to-quote areas like housing and medical care. The result is simple. More estimates. Less signal. More room for surprises.
One independent economist put it cleanly. Markets need CPI for a clear read on inflation. If more than a third is estimated, noise rises. Confidence falls.
Why it matters: the Fed, the tape, your PnL
CPI is the Federal Reserve’s primary inflation gauge. It anchors interest rates and balance-sheet policy. If reported inflation drifts from household reality, policy guidance gets messy. That breeds whipsaws across bonds, stocks, and crypto.
Bond desks already brace for sharper CPI day reactions. If traders think the headline understates real price pressure, yields can snap higher on a hot surprise. Equities can gap. Crypto can rip or roll over. Volatility is the tell. You either front-run it or you get run over.
Next steps: transparency and the trade
Economists and funds want more detail from the BLS. Which CPI components lean on imputation. How those estimates are built. The agency says procedures meet statistical standards. That may be true. But record use of estimates demands stronger disclosure to restore trust.
Until then, you trade what is in front of you. Doubt around CPI means fatter tails on release days. Liquidity thins at the edges. Price discovery gets violent. That is where pros make it count. Position for moves, fade the late chase, and keep one eye on the methodology. When the benchmark wobbles, opportunity expands.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.