Is Fed Rate Cut Expected Despite Govt Shutdown and Data Gaps?

With the US government shutdown dragging on, the Federal Reserve is navigating a complex path as the central government prepares to make a crucial decision next week. Having already dealt with a deteriorating labor market and high inflation, the Fed rate cut has become even more challenging due to a lack of important economic data, such as unemployment data and retail sales, which have been unavailable since the cessation of all economic data from the government. Now, everyone is focused on the current shutdown and how it will impact the central bank’s decision.

Uncertainty Looms

The US government shutdown has entered its 23rd day, making it the second-longest shutdown in US history. The impasse is due to a partisan dispute over funding for the Affordable Care Act's healthcare subsidies, which are set to expire. Since the closure, the officials haven’t released key economic data, including the jobs report and consumer statistics.

Amid this data blackout, uncertainty looms over the Federal Reserve's next move in the October 28-29 FOMC meeting. The crypto community is divided on whether the bank will lower the figure, given the incomplete economic statistics due to the shutdown.

Without access to official data, the Federal Reserve is relying on alternative sources to assess the labor market and consumer spending, two key economic indicators that inform its dual mandate of promoting economic growth and price stability. “The risk is that the Fed misjudges where the state of its dual mandate sits, whether inflation or the labor market is the bigger concern,” stated Glenmede vice president Michael Reynolds.

Is Fed Rate Cut Expected?

Despite these issues, the Fed rate cut is expected , as CoinGabbar recently reported. However, a recent survey found that nearly two-thirds of Americans are either indifferent or unhappy about the Federal Reserve's decision. 59% believe a quarter-point cut wouldn't impact their lives.

Despite potential savings, many Americans seem unmoved, largely due to persistent inflation concerns. In fact, 93% of respondents identified inflation as a major issue, overshadowing the benefits of lower interest rates. John Kiernan, WalletHub editor, noted, “A second Fed rate cut in as many months will save consumers billions of dollars in the next year alone.”

CPI Report to be Released

The US Bureau of Labor Statistics is set to release the September 2025 Consumer Price Index (CPI) report on October 24, 2025, at 8:30 a.m. Eastern Time. Reportedly, experts believe that the CPI is likely to show a rise in inflation. FactSet stated,

“The median estimate, year-over-year, for the consumer price index (CPI) for September 2025 is 3.1%. If 3.1% is the actual year-over-year increase in the CPI, it will mark the highest number since May 2024 (3.3%). It will also be above the trailing 12-month average of 2.7%."