The Federal Reserve (FED) spokesperson warns: Government shutdown makes Fed's decision-making difficult, will there be a rate cut or cancellation in the dark by the end of the year?

The U.S. government shutdown has cut off official data, the Federal Reserve is preparing for further rate cuts in an information vacuum, and markets and officials are plunged into unprecedented uncertainty. (Synopsis: Boom, Fall and Flee, the Web3 Disillusionment History of Classical VCs) (Background supplement: KOLs are posting income, and I want to post the blood and tears lessons of VC 3 years of investment) Nick, who is known as the Fed's sounding board. Writing today, Nick Timiraos warned that the Fed's interest rate cut policy this year could face a change, and since the federal government shutdown in October 2025, it has also begun to disorient financial markets. Since October 1, budget conflicts have forced a government shutdown, hundreds of thousands of civil servants have stopped working, and official economic statistics have been shut down. For the Fed, which relies on data to shape policy, this disruption is not just a procedural obstacle, but a data drought that directly hits the path of interest rates. Government shutdown triggers data drought Nick Timiraos mentioned that key indicators were supposed to be released in early October, such as the September non-farm payrolls report and the consumer price index (CPI), the shutdown forced the Labor and Commerce Departments to suspend releases, and the Fed suddenly lost important milestones in measuring employment, wages and inflation. Chairman Jerome Powell warned that “the situation will become more challenging” if the shutdown drags on, and President Donald Trump has publicly expected a bold rate cut, but without official figures to back it up, the argument is difficult to stand. The policy dialogue then becomes paradoxical: the White House calls for easing, but the Fed has no evidence on which to judge the extent of easing. 25 basis point rate cut in the dark? Before the shutdown, officials were divided on the direction of the economy, with those worried about a sudden decline in labor demand and the other believing that the slowdown in employment was in line with demographic trends and were more wary of inflation and stickiness. Matthew Luzzetti, chief economist at Deutsche Bank USA, believes that in the information vacuum, it is difficult for the Fed to rally support a more aggressive pace, and a relatively conservative 25 basis point rate cut has become “the easiest consensus to form”. Nick Timiraos pointed out that to keep interest rates unchanged: a strong September jobs report and a revised upward revision in the previous period are clearly unlikely to be achieved during the shutdown. Such a compromise rate cut has helped stabilize market expectations, but it has also laid the groundwork, and without real-time data, officials cannot confirm whether inflation has continued to cool or whether the labor market has suddenly deteriorated. Decision-making is forced to resort to risk management: it may be better to relax slightly and adjust it as the situation recovers, although this still depends on the consensus of future FOMC meetings. Limitations and risks of surrogate indicators After the official statistics were disconnected, policymakers and investors turned to private databases: the ADP National Employment Report, the ADP National Employment Report, the job platform Indeed Job Openings Tracker, credit card spending records, and economic models of major banks. However, these indicators are not as complete as official statistics and lack traceable long-term series, making it difficult to cycle back to the past. In other words, private data can only provide fragmented light sources, and cannot replace the “gold standard” of government data. Historically, the United States delayed data twice in 1996 and 2013 due to budget gridlocks, and the Fed finally completed its policy decisions. The difference is that the 2025 shutdown is superimposed on the uncertainty left by the previous government's tariff and immigration policies, and the macro outlook is already chaotic, and this interruption is more complex, and the Fed will make a dark decision at this time, and must consider the risk of rash interest rate cuts. Historical experience and new variables Looking back, the Fed often quickly replenishes decision-making information after data is back online. However, this situation shows that the central bank's reliance on government statistics is already deeply ingrained in the system, and there is no alternative that can fully fill the gap. Every policy meeting during the shutdown is like adjusting the rudder on a dark sea: it must move, but it lacks a star map. “When the North Star is obscured by clouds, the helmsman can only make sure that the boat does not shake violently.” Nick. Timiraos concluded that a 25 basis point rate cut may give markets temporary peace of mind, but it also highlights the centrality of the data base in monetary policy. Without a stable supply of statistics, interest rate tools are like precision gauges that lose their calibration, and the effect is easy to detect easily. Regardless of when the shutdown ends, the experience serves as a common reminder to Washington and Wall Street: It is not just money and confidence that sustain the economy, but every monthly report that is taken for granted. Related reports When VCs hit the sell button: Polychain, Celestia and the crypto world's wealth transfer game Coin circle VC, tells the $2 trillion story to Wall Street YC's latest weather vane: 9 startups sought after by top VCs (Fed microphone warning: government shutdown makes Fed decision-making difficult, cut interest rates or cancel at the end of the year? 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