Data Blackout Ended. The Cycle Shifted.

Note to subscribers: This is a bonus brief covering today’s breaking economic data releases after the 43-day government shutdown. Our regular Wednesday market brief will publish tomorrow as scheduled.

Data Verified: 17:15 UK, Nov 25, 2025 | Bitcoin: TradingView | Fear & Greed: Alternative.me | Retail Sales: Census.gov | PPI: BLS.gov | Consumer Confidence: Conference Board | Fed Odds: CME FedWatch

At a Glance

Data Context:

• Retail expected 0.3%, got 0.2% - weakest in 4 months
• Core PPI expected 0.3%, got 0.1% - inflation cooling faster than forecast
• Consumer confidence expected 93.2, got 88.7 - sharpest drop since April
• Fed cut odds jumped from 70% yesterday to 81% today
• Bitcoin up 6.2% from $82K low, today’s -1.2% is noise
• Fear & Greed unchanged from yesterday (19 → 20)

What Happened:
The 43-day government shutdown created an economic data blackout. Today, September’s delayed reports finally dropped - all dovish. October data was cancelled entirely. The Fed decides Dec 9 with 2-month-old information.

Why This Matters:
QT ends Dec 1. Potential rate cut Dec 9. This is the transition from “draining liquidity” to “pausing the drain.” Not instant tailwind, but structural headwind removal. The starting gun is loading.

Bitcoin Context:
Still recovering from $82K low (now +6.2%). Daily moves are noise. Fear & Greed at 20 shows retail remains cautious despite improving macro setup.

Read paths: 2 min (this box) | 5 min (bold sections) | 12 min (full brief)

What Just Happened: The 43-Day Blackout

If you’ve felt confused about the economy lately, there’s a reason.

For 43 days from October 1 to November 12 the U.S. government was shut down. That’s not just symbolic. It means the statistical agencies responsible for collecting economic data stopped working. No retail sales surveys. No price surveys. No employment surveys.

The economic scoreboard went dark.

Tuesday, November 25, the data finally came back online. September’s reports, originally due in mid October dropped six weeks late. All at once. Three major releases in one morning:

• 8:30 AM EST: Retail Sales and Producer Price Index (PPI)
• 10:00 AM EST: Consumer Confidence

Markets had been flying blind. The Federal Reserve had been flying blind. And now, two weeks before the Fed’s December 9 meeting, we finally have visibility into what the economy looked like… two months ago.

Here’s what the missing data revealed.

The Numbers: What September Showed

Retail Sales: The Consumer is Slowing

Actual: 0.2% | Expected: 0.3% | Prior: 0.6%

Retail sales measure consumer spending - the lifeblood of the U.S. economy. About 70% of GDP comes from consumer spending, so when this number weakens, it matters.

September’s 0.2% gain was the slowest in four months. But here’s the kicker: after adjusting for the 0.3% increase in prices that month (inflation), real spending actually fell 0.1%.

Translation: People spent more dollars, but bought less stuff.

What moved:

• Miscellaneous retailers: +2.9% (strongest category)
• Restaurants and bars: +0.7%
• Online: Flat
• Car dealerships, clothing stores, electronics: Down

The consumer is losing steam. Lower-income households are tapped out. High prices are forcing cutbacks. This pushes the Fed closer to cutting.

Producer Price Index: Inflation Cooling (Slightly)

Headline PPI: 0.3% (as expected)
Core PPI: 0.1% (expected 0.3%) - This is the important one

PPI measures wholesale inflation - the prices producers pay for goods and services before they reach consumers. It’s a leading indicator: what producers pay today often shows up in consumer prices tomorrow.

The headline number came in as expected. But core PPI - which strips out volatile food and energy - came in at just 0.1%, well below the 0.3% forecast.

Year-over-year:

• Headline PPI: 2.7%
• Core PPI: 2.9% (lowest since July)

Underlying inflation pressures are easing. The tariff shock that hit in spring/summer is fading from the data. Profit margins are compressing - some businesses are absorbing costs rather than passing them to consumers. This gives the Fed more room to cut.

Consumer Confidence: The Real Shocker

Actual: 88.7 | Expected: 93.2 | Prior: 94.6

This is the one that moves markets.

Consumer confidence dropped 5.9 points in one month - the sharpest decline since April, when President Trump unveiled sweeping tariffs. It’s now at a 7-month low.

What consumers are worried about (per Conference Board):

1. Prices and inflation
2. Tariffs and trade
3. The government shutdown
4. Job availability
5. Income prospects

The survey showed “decidedly negative” expectations for the labor market over the next six months. Consumers don’t just think things are bad - they think they’re getting worse.

Sentiment is cratering. Even though unemployment is still low (4.4%), people feel like a recession is coming. And when people feel that way, they stop spending. Which makes recession more likely. This strongly argues for Fed easing.

The Problem: What We Still Don’t Know

Here’s where it gets tricky.

The government shutdown didn’t just delay September data. It cancelled October data entirely.

No October CPI. No October jobs report. No complete picture of what happened last month.

The Bureau of Labor Statistics announced it won’t publish an October employment report. Some of that data will be folded into November’s report (due December 16), but we’ve lost granular visibility into a critical month.

The Fed meets December 9. They’ll be deciding monetary policy with:

• September data (2 months old)
• Limited October data
• No complete October picture

They’re making decisions in the dark. And when central banks can’t see clearly, they tend to err on the side of caution.

Caution means cutting.

Why This Matters: Understanding the Fed’s Job

Let’s step back. Why do we care what the Fed does?

Because the Federal Reserve controls the flow of money through the economy. And Bitcoin, like all risk assets, needs liquidity to rally.

The Fed’s Dual Mandate

The Fed has two jobs, by law:

1. Maximum Employment
Keep as many people working as possible. When unemployment rises, the Fed is supposed to ease policy (lower rates, add liquidity) to stimulate hiring.

2. Price Stability
Keep inflation around 2%. When prices rise too fast, the Fed is supposed to tighten policy (raise rates, drain liquidity) to cool demand.

These goals often conflict. Boosting employment can cause inflation. Fighting inflation can cost jobs.

The Fed walks a tightrope. And it uses economic data, like the reports released today to decide which side of the rope to lean toward.

The Current Dilemma

Right now, the Fed faces a judgment call:

The case for cutting rates (dovish):

• Consumer confidence at 7 month low (recession risk)
• Retail spending weakening (demand cooling)
• Unemployment ticking up (labor market softening)
• Core inflation easing (2.9% core PPI, down from 3%+)

The case for holding rates (hawkish):

• Inflation still above 2% target (has been for 4+ years)
• Stock market at all-time highs (no distress signal)
• GDP growth still positive (economy not in recession)
• Cutting too soon risks reigniting inflation

Before today, the Fed was genuinely split. Some governors argued for patience. Others called for a December cut.

After today’s data, the doves have ammunition.

The Market’s Verdict: 81% Odds of a Cut

The CME FedWatch Tool, which uses fed funds futures pricing to calculate the probability of Fed actions now shows:

81% probability of a 25 basis point cut on December 9

That’s up from:

• 70% yesterday (before the data)
• 50% last week
• 30% two weeks ago

Markets are pricing this as nearly certain.

What This Means for Bitcoin: The Liquidity Framework

Here’s where we connect the dots.

Bitcoin doesn’t directly care about retail sales or consumer confidence. But it cares deeply about liquidity - the amount of money available to flow into risk assets.

What is Liquidity?

Think of liquidity as the water level in the economy. When there’s a lot of money sloshing around (high liquidity), it flows into stocks, real estate, crypto - anything that might generate returns.

When money is scarce (low liquidity), capital retreats to safe assets: cash, bonds, gold.

The Fed controls the liquidity tap through two main tools:

1. Interest Rates
When rates are high, borrowing is expensive. Money stays parked. When rates are low, borrowing is cheap. Money flows.

2. Quantitative Tightening (QT) / Quantitative Easing (QE)

• QT: The Fed shrinks its balance sheet by letting bonds mature without replacing them. This drains liquidity from the system.
• QE: The Fed expands its balance sheet by buying bonds. This injects liquidity.

Since 2022, the Fed has been running QT - draining about $2 trillion from markets. That’s been a structural headwind for all risk assets, including Bitcoin.

December 1: The Headwind Removal

On December 1, 2025, the Fed officially ends QT.

This doesn’t mean they’re adding liquidity. It means they’re stopping the drain.

Think of it like this:

• QT (2022-2025): Bathtub draining
• Dec 1 (QT ends): Drain plug closed
• QE (future): Water flowing back in

We’re at step 2. The drain stops. The water level stabilizes. But it doesn’t refill yet.

Ending QT removes a structural headwind. It doesn’t create a tailwind. But it’s the necessary first step.

December 9: The Potential Cut

If the Fed cuts rates on December 9, it adds a second liquidity-positive factor:

• Lower borrowing costs
• Easier credit conditions
• More attractive environment for risk assets

Combined with QT ending, this shifts the liquidity backdrop from “tightening” to “easing.”

Not aggressively easing. Not QE-level easing. But directionally supportive.

The 2019 Precedent: Why Patience is Required

This isn’t the first time the Fed has ended QT.

In September 2019, the Fed stopped balance sheet reduction after a liquidity crunch in overnight lending markets. They also cut rates three times that year (July, September, October).

What happened to Bitcoin?

It fell.

From a July 2019 peak around $13,000, Bitcoin dropped to $7,200 by December—a decline of about 35% over three months.

The rally didn’t come until March 2020, when the Fed launched full-scale QE in response to COVID. Bitcoin then went from $3,800 to $64,000 over the next 13 months.

The lesson: Ending QT doesn't necessarily mean an instant rally. There’s typically a lag between:

1. Removing the headwind (QT ends)
2. Adding the tailwind (QE starts)

During that transition, markets can remain volatile or weak.

Why?

Because “not draining” isn’t the same as “adding.” The liquidity tap goes from negative to neutral, not negative to positive.

The Starting Gun Thesis

Here’s how we’re framing December:

December 1: QT ends. The headwind is removed.

December 9: Potential rate cut. Liquidity conditions shift from “tight” to “neutral/accommodative.”

December-February: Transition period. Markets digest the shift. Volatility likely. Not expecting immediate rally.

Q1 2026: If liquidity continues to improve and if the Fed signals more easing ahead - risk assets enter a favorable setup.

Current cycle position: 0 out of 30 cycle top indicators triggered. CBBI at 59/100 (threshold for blow-off top is 90+). This looks like we’re mid-cycle, not late-cycle.

Bitcoin context: Now at $87,257 - up 6.2% from the $82,175 November low but still 31% below the $126,080 October high. Daily price moves are noise. Fear & Greed at 20 shows retail sentiment remains extremely cautious.

Our view: The starting gun is loading, not firing yet. Patience required. But the structural setup is improving.

What Could Change This?

The December cut looks increasingly likely based on today’s data. But the Fed doesn’t always follow market pricing. Here are the scenarios that could shift the calculus:

Upside risks (cut becomes less likely):

• Core PCE (due late November) comes in hot, showing inflation re-accelerating
• Labor market data (jobless claims this week) shows unexpected strength
• Powell pushes back on market pricing in public comments, signaling patience

Downside risks (cut becomes more certain):

• Consumer confidence continues cratering in December reading
• Friday’s Chicago PMI shows manufacturing in deeper contraction
• Credit markets show signs of stress (corporate spreads widening)

Most likely: Fed follows through with the cut the market is pricing. But December FOMC is genuinely live - not a foregone conclusion despite 81% odds.

Week Ahead: Thanksgiving Liquidity Trap

This week is not a normal trading week.

Wednesday, November 26:

• Initial Jobless Claims (8:30 AM EST)
• Durable Goods Orders—delayed September data (8:30 AM EST)
• Fed Beige Book (2:00 PM EST)

Thursday, November 27:

• Thanksgiving. Markets closed.

Friday, November 28:

• Chicago PMI (9:45 AM EST)—manufacturing health check

Why this matters:

Institutional traders take Thanksgiving week off. Market depth shrinks dramatically. Order books thin. Small flows move prices more violently.

Historical pattern: Thanksgiving week has coincided with notable Bitcoin volatility in prior years. Not a prediction—just context for why markets often move erratically this week.

Exaggerated moves likely. Don’t read too much into daily price action through Friday. Volume and depth return next week.

Key Levels

Trend: Recovering from capitulation low, consolidating $86K-$89K
Bias: Neutral with improving macro backdrop
Risk: Thanksgiving volatility amplifies noise

The Bottom Line

The 43-day data blackout created a fog. Today, that fog partially lifted and revealed an economy that’s slowing but not collapsing, with inflation easing but still above target.

The Fed now has cover to cut rates on December 9. Combined with QT ending December 1, this marks a meaningful shift in liquidity policy.

But, and this is critical, removing headwinds is not the same as adding tailwinds.

The 2019 precedent shows that Bitcoin can fall even after QT ends and rates are cut. The rally came when the Fed moved from “pausing the drain” to “actively refilling” (QE).

We’re at step one. The drain is closing. That’s necessary. But it’s not sufficient.

The setup: Favorable for Q1 2026, assuming liquidity continues to improve.

The timing: Patience required through the transition.

The signal: 0/30 cycle indicators triggered. Bitcoin up 6.2% from recent low. This doesn’t look like a top.

The starting gun is loading. Not firing yet. But loading.

Pattern recognition, not prediction.

This brief provides educational market commentary based on publicly available data. It does not constitute financial advice. Cryptocurrency investments carry significant risk. Past patterns do not guarantee future results. The author holds Bitcoin.

Pierce & Pierce Market Brief
Tuesday, November 25, 2025

Sources: TradingView | Alternative.me | Census.gov | BLS.gov | Conference Board | CME FedWatch | CNN Business | Trading Economics

Connect: pierce-pierce.ghost.io | @PiercePierceNYC | r/PiercePierce