Federal Reserve policy decisions based on government data have become somewhat more problematic due to the government shutdown.
In an address in Philadelphia on Tuesday, Fed Chairman Jerome Powell referenced that statistics from the Labor Department, for example, have been delayed because of the shutdown. And some of those statistics are used to calculate cost of living adjustments for Social Security recipients.
Powell said an ongoing scarcity of data will most likely be particularly felt towards the end of the month, at which point, he remarked ” it could become more challenging.”
Despite the data scarcity, Powell indicated that rates will likely be cut at least a little by the end of the month.
But the ever-cautious Chairman made sure to add: “If we move too quickly, then we may leave the inflation job unfinished and have to come back later and finish.”
But for all of that, Powell added: “If we move too slowly, there may be unnecessary losses, painful losses in the employment market.”
Powell was speaking before a meeting of the National Association of Business Economists, delivering what are expected to be his final public remarks on interest rates before the Fed officially reveals its latest policies on October 28.
Powell said, judging from the statistics he does have at hand, that the “outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago.”
In fact, on a hopeful note, the Chairman continued, “Growth in economic activity may be on a somewhat firmer trajectory than expected.”
“Near-term inflation expectations have generally increased this year, while most long-term expectation measures remained aligned with our 2% goal,” Powell added.
October 16, 2025
By Garry Boulard
Photo courtesy of Federal Reserve
