On Friday, October 24, 2025… Jerome Powell, Chair, Open Meeting. @FedReserve 10/24/25 He was able to confront some very real fears about what the future of monetary policy holds while at this historic event. His comments highlighted the devastating impact of the current government shutdown. The impact it has had on keeping policymakers in the dark about critical economic data, exacerbating uncertainty.
During his previous speech on October 14, Powell left open the possibility of further rate cuts as the Federal Reserve navigates a challenging economic landscape. He highlighted the foundational importance of quality data in making smart, effective and efficient decisions. He warned that the lack of government data might exacerbate the dilemma.
The Federal Reserve will modify its own economic projections at its late December meeting. Powell and other central bankers made the case that they could do so without strong surges in inflation. This call to action will depend on whether that data blackout persists. This trend comes on the heels of a recent consensus among policymakers to start lowering rates for the first time since December 2024.
Impact of Government Shutdown
The continuing government shutdown has caused a huge data blackout. This lack of visibility prevents the Federal Reserve from operating in a data-driven manner. Major reports, such as September’s job report, typically provide rich context about the current state of labor market trends. Those haven’t been released yet. The expected October jobs report, due November 7, is likewise in jeopardy of being delayed. This lack of data creates a tough situation for Powell and his fellow policymakers in gauging what’s going on in today’s economy.
Powell recognized the challenges that result from working without essential information. He stated, “The outlook for employment and inflation does not appear to have changed much since our September meeting.” His remarks are emblematic of the careful but warranted optimism out there mixed with the very real dangers created by the absence of timely information.
Chicago Fed President Austan Goolsbee emphasized the challenges posed by the data blackout, stating, “And if you’re not going to get the data, it’s just that much harder.” Kathy Bostjancic, the chief economist at Nationwide, agreed. Her clear call-out of the gap in government data contributing to uncertainty may force the Fed to be more cautious about rolling out any rate cuts compared to past cycles.
Future Rate Cuts Remain Uncertain
While financial markets are currently pricing in a potential rate cut in December, Powell and other officials recognize that their ability to act will heavily depend on available data. According to the CME FedWatch Tool, futures market participants are anticipating a change in monetary policy. The signs from Powell’s latest comments point toward a more cautious approach.
Powell reiterated the importance of allowing the Federal Reserve to judge the present condition of the economy. This assessment will shape any large-scale decisions in the future. “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,” said Fed Governor Christopher Waller. Adopting this approach would demonstrate the Fed’s willingness to move cautiously in reaction to economic signals.
These risks have not escaped the notice of central bankers. The latest figures for August pointed to that weakening. This situation exacerbated anxieties about job security with possible major shifts in monetary policy on the horizon. The lack of key monthly reports—including those on jobs and inflation—would make their already difficult decision-making all the more opaque.
The Road Ahead for the Federal Reserve
As Powell prepares for his post-meeting news conference scheduled for 2:30 p.m. ET on Wednesday, he will likely discuss how the lack of government data impacts future policy moves. And of course, the Federal Reserve’s decisions have a direct impact on how much economic growth we see. They’re under the thumb of outside influences, like President Donald Trump’s unrelenting demands for drastic rate cuts to juice up the economy.
The next Consumer Price Index (CPI) report will be released on November 13. That could be pushed back if the federal government shutdown persists. This uncertainty muddies the Fed’s ability to gauge where inflation is headed and how the dynamics of the labor market are shifting.