Summary
The Federal Reserve is likely to cut interest rates despite a lack of government economic data due to the shutdown. This missing data affects the Fed's ability to track employment and inflation. However, the Fed believes current rates are restricting economic growth and may continue cutting rates to encourage growth.
Key Facts
- The Federal Reserve is expected to cut interest rates for the second time this year.
- A government shutdown stopped the usual flow of important economic data, like jobs and inflation reports.
- The September jobs report is delayed, and the upcoming hiring report may also be late.
- Some Federal Reserve officials believe current interest rates are too high and could slow down economic growth.
- The unemployment rate increased slightly from July to August.
- Inflation remains high, but it is not accelerating, which might not require higher interest rates.
- The Federal Reserve might stop reducing its large amount of securities holdings.
- The Fed's securities holdings were built up during past economic crises to keep interest rates low.
