Lack of U.S. Economic Data May Prompt Fed to Keep Rates Steady at December FOMC Meeting

The U.S. government shutdown has delayed the release of key economic data, including the October consumer price index and jobs reports, which will prolong the debate about whether another rate cut is needed at the Fed’s December meeting. “The absence of official reports will make it difficult for policymakers to assess the trajectory of inflation and the job market, and alternatives to government inflation figures are harder to come by and more limited in scope,” said a Bloomberg report. “The shutdown’s impact on data collection and release will likely give (Fed) policymakers further reason to hold off on a rate cut in December, despite market odds still favoring a reduction, and investors will monitor appearances by Fed officials in the coming week for clues on the Fed’s next move,” said Bloomberg. “Even if the government were to reopen, it’s unlikely the Bureau of Labor Statistics would be able to collect and process data for both the October and November CPI reports ahead of the December FOMC meeting. We think October’s figures would have greenlit a rate cut at the final meeting of the year,” said Bloomberg Economics.
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