US shutdown risk triggers workaround talks in $2.1 trillion inflation-linked bond market

Officials and traders are preparing contingency plans for Treasury Inflation-Protected Securities (TIPS) as the U.S. government shutdown looms, threatening to disrupt pricing data and redemption calculations. A technical workaround—potentially the first of its kind—may be implemented to ensure continuity in index-linked debt operations. The $2.1 trillion market underpins many pension and inflation-hedge portfolios. Analysts warn that prolonged delays in CPI data publication could complicate coupon adjustments and bond settlements, forcing investors to rely on modeled inflation proxies until data releases resume.