As if the Federal Reserve work isn’t complicated enough, the closure of Washington, D.C. is about to make things worse. The government halted the operation in the middle of the night. This means that the government’s economic report, including the non-farm salary report scheduled for Friday, will not be released. Fed officials will essentially lose access to some of the most important tools they use to grasp the next move on monetary policy. The timing is not good at their next meeting just four weeks later. “For the Fed, lack of timely labor market data adds a layer of complexity to decision-making, especially at sensitive moments,” says Lydia Boussour, senior economist at Ey-Parthenon. The Fed is essentially data dependent, giving them the job of determining where interest rates should be more complicated without getting information that policymakers don’t rely on. The Bureau of Labor Statistics’ September employment report will be its first test. It is generally considered to be the last word on the labour market. Labor officials say that economic data will not be collected or released as long as the closure continues. So Fed officials need to look elsewhere and make reports like Wednesday private pay numbers from the ADP quite important. As an organization not funded by Congress, the Fed will not be affected by the closure. “There are other types of data that try to understand the labor market as well,” Boston Federal President Susan Collins said in a speech at Tuesday’s meeting in New York, hosted by CNBC’s Seema Mody. “Many of them are actually based on BLS data, so it can be a problem over time.” The market is widely hoping that the Fed will approve a quarterly percentage point cut at its October and December meetings, but the uncertainty surrounding the data used by data policymakers can add to the confusion. “We’re committed to providing a great opportunity to help you,” said Chris Rupkey, Chief Economist at FWDBonds. “Fed officials need to prepare for uncertainty and increase the number of dart boxes to throw on the dartboard as the release of actual economic data is likely to be dark.” (Learn the best 2026 strategy from within the NYSE along with Josh Brown and others on CNBC Pro Live. Tickets and info here.)
