US: Fed Navigates Uncertainty Amid Shutdown Fog
For twelve days, political gridlock in Washington has paralyzed the release of official economic statistics. Inflation, employment, growth: everything is on hold. An unprecedented “statistical fog” is forcing the Fed and the markets to rely on private indicators.
Uncertainty Surrounds Inflation and Employment
The release of the September figures has been postponed to October 24. In the meantime, the Cleveland Fed and the Truflation platform estimate inflation at around 3% year-over-year, with core inflation near 3.2%.
In terms of employment, public indicators are on hold, but ADP and Challenger data indicate a gradual deterioration in the labor market, with unemployment estimated at 4.3% according to the Chicago Fed.
This lack of statistical benchmarks increases the risk of error: every tenth of a point is crucial in monetary policy decisions.
A Cautious Fed, Nervous Markets
Deprived of reliable data, the Federal Reserve relies on its regional branches and internal models. Christopher Waller acknowledged a deterioration in the labor market, but the Fed is hesitant to ease its policy too quickly as long as inflation remains uncertain.
Markets, meanwhile, remain resilient yet volatile. The shutdown is a reminder of how much the United States depends on economic statistics to steer its monetary policy.
As Florent Wabont from Ecofi summarizes: « It's hard to navigate blindly... but we must keep moving forward."
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
