"Fed's Megaphone": Key Economic Data Absence May Lock in 25 Basis Point Rate Cut Path

[“Fed's Mouthpiece”: Missing Key Economic Data May Lock in 25 Basis Point Rate Cut Path] “Fed's Mouthpiece”, Wall Street Journal reporter Nick Timiraos wrote on Thursday that a prolonged government shutdown is forcing Fed officials to make their next interest rate decision in the absence of crucial economic data, which could have quelled the intense debate over the magnitude and pace of rate cuts. Ironically, without clear evidence of a sharp deterioration in the labor market that these reports could provide, Trump's efforts, along with his allies, to seek a more significant rate cut are likely to be in vain. The article states that the absence of new government data essentially locks in the prospects of the Fed cutting interest rates by another 25 basis points at its next meeting in two weeks—after just completing a similar cut last month. Last month, concerns over a sharp decline in the labor market outweighed worries about stubborn inflation, and Fed Chair Powell indicated this week that the balance of such concerns has not changed during the recent data void.