Lack of data unlikely to stop Fed's rate cut

However, the continued US government shutdown has stalled economic statistics reports, increasing the challenge for monetary policymakers in assessing the real health of the economy.

The lack of key data forced the Fed to make decisions in a state of “blind information”, without full indicators as usual. However, analysts said that this agency is likely to still cut interest rates by 0.25 percentage points, bringing the base interest rate range down to 3.75-4%, while avoiding sending a clear signal about policy direction at the last meeting of the year in December.

The lack of official data has intensified the debate within the Fed: whether to continue easing monetary policy to support a weakening labor market, or to maintain a hawkish stance as inflation remains above its long-term 2% target.

The September 2025 Consumer Price Index (CPI) – released 10 days late due to the government shutdown – recorded a 3% increase, lower than market forecasts. However, prices remained high, partly due to the impact of the broad tariffs that the Trump administration has imposed on America’s top trading partners.

Under Congress 's mandate, the Fed has two primary responsibilities: controlling inflation and maintaining employment, through its tool of adjusting the federal funds rate.

Mr. Joseph Gagnon, a former Fed official and now a senior expert at the Peterson Institute for International Economics (PIIE), said the Fed will have to determine whether inflation still has room to increase or has peaked, which he said is a very difficult question to answer in the current context.

Mr. Gagnon said that the argument that “inflation is transitory, while the weakness in the labor market may be more persistent” is likely to prevail at the October 2025 meeting, because the available data still support this assessment.

The US government officially shut down on October 1. Since then, only the CPI report for September 2025 has been released. Although still higher than the Fed's 2% target, this 3% increase was lower than expected, contributing to positive sentiment in the stock market, helping major indexes increase sharply in the trading session on October 24.

The Fed also uses another measure to assess inflation, but that reading – based on data before the government shutdown – is still above its target.

On the other hand, job growth showed clear signs of slowing down, with only 22,000 new jobs created in August 2025, although the unemployment rate remained around a historic low of 4.3%.

Source: https://vtv.vn/cang-thang-thieu-du-lieu-kho-can-da-ha-lai-suat-cua-fed-100251026191502535.htm