WASHINGTON–The job for the Federal Reserve, which is already under pressure from the Trump administration to cut rates even as it remains concerned over elevated inflation, is only going to get tougher as the government shutdown continues, as it will not be provided with the economic data it needs to make decisions.
The Bureau of Labor Statistics has said it will not be publishing this Friday’s jobs report, while other key data releases, including the next Consumer Price Index report, are also in peril if Congress and President Trump do not reach a deal soon, the New York Times reported in its analysis.
The Federal Open Markets Committee is next set to meet Oct. 28-29.
‘Murky View’
“That would leave the Fed with a murky view of the economy when the central bank’s officials are already at odds about its approach to interest rate cuts before their next vote at the end of the month,” the Times added.
“It pains me that we wouldn’t be getting official statistics at exactly a moment when we’re trying to figure out is the economy in transition,” Austan Goolsbee, president of the Federal Reserve Bank of Chicago and a voting member on this year’s policy-setting committee, told the Times.
As the analysis noted, what policymakers would like to know is just how much they are restraining the economy with their policy settings.
‘Assessment Gets Harder’
“That assessment gets harder if they have only alternative sources of economic data to parse,” the report stated. “If interest rates are holding back growth only a little bit, the Fed may not have much room to reduce borrowing costs before reaching what officials refer to as a ‘neutral’ level.”
