The Dow Jones (DJIA) opened in positive territory on Wednesday ahead of the highly anticipated Fed interest rate decision at 2 p.m. Eastern Time. The central bank is widely expected to cut rates by 25 bps with 99.9% odds, according to CME’s FedWatch tool.
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If that scenario plays out, it would mark the Fed’s second rate cut in 2025.
Government Shutdown Leaves Fed Flying Blind
The government shutdown, now in its 29th day, has led to the delay of key economic data that the Fed uses to guide interest rate decisions, such as inflation and labor statistics.
“In the absence of the official data for jobs, they’re going to lean on other sources of information, which at this point aren’t really going to contradict what they have argued as their reason for cutting,” said former Fed official Esther George in an interview with Yahoo Finance.
The lack of data comes as the labor market has shown signs of weakness, with the unemployment rate rising to 4.3% in August, the highest level since October 2021.
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