The US Federal Reserve will have to decide on the trajectory of its policy rate without key inflation indicators. The Bureau of Labor Statistics (BLS) canceled the October consumer price index (CPI) release due to the partial government shutdown that prevented data collection. Traditional gathering methods, such as in-person visits or telephone interviews, could not be used, making the report impossible to compile. Originally slated for November 7, the CPI will not be replaced, and November's release has been delayed from November 10 to December 18, i.e. after the Fed's December 10 meeting.
In this context of uncertainty, another inflation barometer, the personal consumption expenditures price index (PCE), is also affected. Due out on November 26, its release by the Bureau of Economic Analysis has been postponed to an unknown future date. Faced with this lack of visibility, Fed officials worry about the impact on shaping their monetary policy. As early as October, internal discussions reflected discomfort over the lack of consolidated data, even though the Federal Reserve had cut its policy rate by 25bp at that time.
Despite this "statistical fog", as Fed Chair Jerome Powell called it, some members of the monetary committee believe that adjustments remain possible. John Williams, president of the Federal Reserve Bank of New York, mentioned the possibility of a new short-term easing. Meanwhile, Governor Christopher Waller says that the central bank still has enough information to make informed decisions, even with the temporary absence of some indicators.
