WASHINGTON, Nov 9 (Reuters/Bloomberg) — The prolonged U.S. government shutdown has deepened uncertainty for the Federal Reserve, as delays in the release of key inflation and employment reports make it harder for policymakers to gauge the state of the economy ahead of the December interest rate meeting.
The Bureau of Labor Statistics (BLS) was scheduled to release October’s Consumer Price Index (CPI) this week, but the shutdown has disrupted data collection and publication. Analysts now believe the BLS may forgo issuing an October CPI report entirely, adding to a growing information gap for central bankers.
Fed Faces Growing Data Void
The absence of official economic data has prolonged debate within the Fed on whether another rate cut is necessary. While the central bank relied on September’s CPI for its last meeting, officials still lack updated job and inflation numbers that typically guide monetary policy decisions.
“Even if the government reopens soon, it’s unlikely the BLS can collect and process both October and November reports before the December meeting,” economists at Bloomberg Economics noted. “October’s figures likely would have supported a rate cut.”
The shutdown’s impact on data collection is forcing economists and investors to rely on limited private-sector alternatives such as the Cleveland Fed’s “nowcast” CPI, which indicates inflation held near 3% in October — close to September’s reading.
Markets Still Betting on December Cut
Despite the uncertainty, market odds continue to favor a rate reduction in December. However, Fed Chair Jerome Powell recently signaled caution, saying further cuts are “not assured.”
Analysts suggest the lack of official data could push policymakers to pause rate changes until clearer inflation and employment numbers become available.
Investors are now watching a series of upcoming speeches from Fed officials — including John Williams, Raphael Bostic, Stephen Miran, and Alberto Musalem — for potential hints about the central bank’s next move.
Global Outlook: Data and Policy Ahead
The data blackout in the U.S. comes as central banks across the globe navigate their own economic challenges.
- In Canada, policymakers are set to release details explaining their October rate cut and outlook for 2026.
- Across Asia, inflation data from China, India, and Australia will help shape local monetary strategies.
- Meanwhile, Europe and the U.K. await key wage, GDP, and industrial output reports that could influence rate decisions in December.
Economists warn that the shutdown’s prolonged impact could not only distort U.S. inflation tracking but also cloud global market sentiment, as investors look for clarity in a week dominated by uncertainty.