The U.S. Federal Reserve is preparing for its next policy meeting under an unusual cloud of uncertainty, with the ongoing government shutdown halting key economic data releases and leaving policymakers without a clear picture of the economy’s health.
Official employment figures have not been published since the shutdown began on October 1, while limited private data suggests that job growth remains weak and consumer spending may be losing steam.
At the same time, inflation is still running above the Fed’s 2% target, adding to the central bank’s policy dilemma.
Financial markets widely expect the Fed to cut interest rates by 25 basis points to a range of 3.75–4.00% at its October 28–29 meeting.
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But analysts warn that officials are “flying blind” without reliable government data to guide their decisions. “The big question mark right now is what’s happening in the labour market,” said David Seif, chief economist for developed markets at Nomura.
Fed Chair Jerome Powell and other policymakers have recently emphasised the importance of the job market, which has slowed sharply from pre-pandemic levels. However, the broader picture is mixed: strong investment in artificial intelligence contrasts with weak retail sales and cautious business sentiment.
Kansas City Fed President Jeffrey Schmid said the current rate remains “the right place to be,” arguing it’s still high enough to keep inflation in check. Others, like Fed Governor Stephen Miran, believe interest rates are too restrictive and risk dampening growth.
The shutdown has made it harder to track inflation, consumption, and GDP trends. While the government plans to release September’s Consumer Price Index on October 24, other crucial reports could remain delayed.
Fed officials admit that while private data such as credit card transactions and unemployment claims offer partial insights, they are no substitute for official statistics.
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“It’s a particularly tricky moment,” said Fed Governor Christopher Waller, who supports a cautious quarter-point rate cut this month but noted that future decisions will depend on how inflation and job growth evolve.
Minneapolis Fed President Neel Kashkari echoed similar concerns: “We can make our way through for now, but the longer the shutdown continues, the less confidence I have that we’re reading the economy appropriately.”
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
