Jerome Powell, the U.S. Federal Reserve’s chairman, confronted the biggest economic test of his tenure. Here’s the testimony that he delivered at the Federal Reserve Board’s open meeting in Washington D.C. on Friday, October 24, 2025. He acknowledged the challenge his institution is facing with high interest rates. This state of affairs has been compounded by a government shutdown that has stopped the release of key economic data.
In his comments, Powell signaled there could still be rate cuts as soon as December though that’s an open question given the uncertainty now. He argued that the Federal Reserve need do no more than tread lightly. The lack of federal data has made it more difficult for them to feel confident in their decision-making. The implications of this data vacuum will be further elaborated upon during his post-meeting news conference scheduled for 2:30 p.m. ET on Wednesday.
Economic Pressures and Rate Cuts
That’s exactly the action that President Donald Trump has been pressuring Powell’s Federal Reserve to take. Specifically, he calls for aggressive rate cuts in order to jump-start economic growth. Earlier this month, Powell surprised everyone when he revealed that the Fed had voted unanimously to reduce interest rates for the first time since last December. He cited a deteriorating labor market, a condition reflected in data through August.
The absence of crucial reports, such as the September jobs report and the upcoming October jobs report due on November 7, has raised concerns among policymakers. The shutdown has left these critical indicators unreleased, compelling Powell and his colleagues to consider previous strategies if the data blackout persists.
“The outlook for employment and inflation does not appear to have changed much since our September meeting.” – Jerome Powell
As a result, market analysts and some officials are ringing alarm bells. Most of all, they express concern that without new data, future monetary policy decisions will be misplaced. Financial markets are pricing in a quarter-point rate cut by December. Skepticism lingers, as global market shifts continue and central bankers search for more definitive economic signals.
Challenges of Limited Data
The current comprehensive government shutdown has caused major disruptions including the Federal Reserve’s ability to get a clear picture of economic conditions. Important economic indicators are either delayed or suspended, meaning policymakers are operating without crucial information to inform their decisions. The October Consumer Price Index (CPI), scheduled for November 13, may face suspension if the shutdown continues, further complicating Powell’s policy decisions.
Here’s what Chicago Fed President Austan Goolsbee had to say about the situation.
“And if you’re not going to get the data, it’s just that much harder.” – Austan Goolsbee
As well as Powell, other central bankers are preparing for their next meeting in December. Despite widespread positive momentum, they have been rightly cautious, given the continued uncertainty. The lack of quality data could slow down the rollback of rates. This could be the case although market expectations point to the opposite trend.
Future Projections and Cautionary Approaches
The Feds’ summary of economic projections come out during every other meeting, with the next round due in December. The dynamics of the current moment have led to some interesting speculation. This would require Powell to develop new analyses rather than just adopt existing strategies.
Kathy Bostjancancic, chief economist at Nationwide, underscored the big worry. She cautioned that the Fed might take a more deliberate pace to cuts than typical because of the uncertainty introduced by the absence of adequate data.
“The Fed could conclude there’s so much uncertainty because of the lack of government data that it takes it slower with cutting rates than it normally would.” – Kathy Bostjancic
Fed Governor Christopher Waller offered a different take, stressing the importance of caution in pursuing policy decisions. He recommended a cautious approach to any proposed reductions.
“You don’t want to make a mistake, so the way to avoid that is to go cautiously or carefully and do [a quarter-point cut], wait and see what happens, and then you can get a better idea of what to do.” – Christopher Waller