Look for a quarter-point cut even though the BLS will post the CPI ahead of the meeting.
CME Fedwatch sees a 94.7 percent chance of a quarter-point cut by the Fed with a 5.3 percent chance of a half-point cut.
The two key reports are jobs and and the CPI. The latter will be concocted, and the former will be further delayed.
US Shutdown Threatens to Erode Quality of Important Inflation Data
Bloomberg reports US Shutdown Threatens to Erode Quality of Important Inflation Data
The US government shutdown threatens to erode the quality of one of the nation’s most important inflation statistics — if there even is a report at all.
Policymakers, economists and investors are already worried about how October’s consumer price index, due for release next month, will be affected by the government shutdown. While the Bureau of Labor Statistics was directed to recall some staff to prepare the September CPI in a rare exception, the agency hasn’t been able to collect any new price information since the Oct. 1 closure.
“Starting now, accuracy is getting worse,” Omair Sharif, president of Inflation Insights LLC, said in an Oct. 9 interview, just over a week into the shutdown. “By the third week, you’re looking at very bad quality — or no data at all.”
Of all the government data that isn’t produced in a lapse of funding, the CPI stands out because of the labor-intensive nature of collecting prices. The BLS gathers information about roughly 80,000 items across the country, mostly done in-person through three 10-day periods throughout the month.
That was already a challenge with staffing cuts in the Trump administration — due to resource constraints, the agency has suspended parts of the CPI sample in recent months and consequently leaned more on a particular kind of imputation to fill in the blanks.
“They cannot go back to the past, so they will impute more,” said Erica Groshen, who served as BLS commissioner during the 2013 government shutdown. The staff will also probably have to work faster, or possibly put in overtime due to the compressed timeline, she said.
Like any other government report in a shutdown, the September CPI — originally scheduled for release Wednesday — wouldn’t have come out on time, even though all data collection was completed by Sept. 30. But BLS was told to bring back workers to assemble it so the Social Security Administration could meet a deadline to make its annual cost-of-living adjustment for recipients next year. The data is now due Oct. 24.
While that will come in time for the Federal Reserve’s meeting at the end of this month, missing data in the shutdown — particularly for October — could make policymakers’ job more difficult, Chair Jerome Powell said at a conference Tuesday.
“Don’t put too much weight on anything abnormal in October,” said Veronica Clark, an economist at Citigroup Inc. “Take it with a grain of salt.”
Thirteen Delayed Reports
- Oct 1: Census Department – Construction Spending
- Oct 2: Census Department – Motor Vehicle Sales
- Oct 2: Labor Department – Jobless Claims
- Oct 2: Census Department – Factory Orders
- Oct 3: BLS – Employment Situation (Nonfarm Payrolls Household and Establishment surveys)
- Oct 7: BEA – Trade Balance
- Oct 9: Labor Department – Jobless Claims
- Oct 15: BLS – CPI (Delayed Until October 24)
- Oct 16: Census Department – Retail Sales
- Oct 16: BLS – PPI
- Oct 16: Census Department – Business Inventories
- Oct 17: Census Department – Housing Starts and Permits
- Oct 17: Census Department – Import and Export Prices
Next week, more reports will go missing.
The only expected report the Fed will have in hand is the CPI.
The November CPI report (for October) will be severely damaged goods due to missing manual data collection.
Trump Recalls BLS Workers to Produce CPI Report
On October 10, I noted Trump Recalls BLS Workers to Produce CPI Report Because SS Payments Need It
Quick CPI Summary
- The Trump administration is recalling furloughed workers to publish the September consumer-price index, which is used for various government services.
- The Social Security Cost of Living Adjustment (COLA) for 2026 relies in part on September CPI data.
- September inflation data also affects Treasury inflation-protected securities, and I bonds.
- The Fed uses CPI data in its determination of monetary policy
Related Posts
September 11, 2025: CPI Provides No Reason for Fed to Cut Interest Rates, It Will Anyway
The CPI was higher than expected in August, but the Fed will do what it wants to do.
October 7, 2025: How Screwed Up Are BLS Real and Nominal Median Earnings?
Discrepancies between ADP and the BLS are vast. Let’s start with the BLS.
Is Homeowners Insurance Understated in the CPI?
I discussed homeowners insurance on August 11, 2025 in Is Homeowners Insurance Understated in the CPI? Shop Around!
Our Insurance went up by $2,000. Then another $2,000. Here’s our story.
Also consider Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?
Does the BLS match your budget?
Don’t worry, Trump says “There is virtually no inflation.”
Addendum
Make that 14 delayed reports and counting. Today’s expected Industrial Production report is delayed.
The IP report is from the Fed which is independently funded. But it’s been delayed too, most likely due to missing data.
Another rate cut will give the appearance of equal FFR reductions under Biden and Trump (depending how the December 2024 cut is viewed). It also completes Powell’s prediction of 6 cuts, he made in October 2023. Powell’s forecast determined lower rates offered for BTFP loans. The 1.5 percent rate reduction allowed wealthy brokers to arbitrage borrowed money in stock and long Treasuries. Equity indexes and Bonds rallied in gaps on the same day. Opposite to free market activity. What happens now that FFR matches bestowed BTFP loans.
The Fed’s trillions in QE, and fractional banking, has left the Fed with a negative income since 2023. A convenient Fed regulation states, while the Fed copes with operating losses, they aren’t required to pay interest to the Treasury. Although the Fed can create money to fund its operations including QE. The Fed captures its losses in an accounting device called a deferred asset. According to analysts, this account will take years to recover.
https://www.reuters.com/markets/us/fed-says-official-net-negative-income-was-1143-billion-2023-2024-03-26/
Unlike consumer debt, where failure to pay credit card interest forgoes additional purchases. The Fed pays corporate banks interest to their wealthy associates, but not to the Treasury, which would reduce national debt and lower inflation. Reduction of interest payments to banks was the rationale behind draining $2T in the Fed’s overnight lending facility with its BTFP scheme.
There are substantial 10-year Treasuries that mature in 2026. Yellen lowered rates to historic levels and suppressed for most of election year 2016. Due to the Fed’s negative income, they want to delay or reduce additional QE. The Fed may blindly seek additional reduction of FFR, allowing wealthy brokers to further arbitrage long Treasuries, lowering long rates for the Fed to repurchase. Except, a reduction in long yields near 2 percent is a task in a 3 percent inflation economy.
A blind man can still find the “PRINT” button on the money printer, and change the toner cartridge. No special skills needed to be a Central Banker in the West, just a complete willingness to ignore reality.
The US$ is down, what 10%+ this year, so all investors in the US lost money, in real purchasing pwer terms, even as the value of their stawks went up. Soon they will have to sell their entire portfolio to get enough money to buy a roll of toilet paper.
Let’s face facts, the entire West is swirling the bowl now, on the way down. One more flush and it’s all gone down the tube. No amount of p[rpaganda or wishful thinking can cover up that reality, except for the deluded sheeple who still get their info from the MSM.
And it’s all our fault, collectively and individually – this happened in our time, on our watch, and very few even realized it was happening, or spoke up about it.
If only they printed dollars. In reality they are borrowed into existence with interest due. By far mostly in the fractional reserve banking system, not the Fed. The whole system is too stupid to be stupid.
The Federal Reserve has many avenues for data collection and I do not think that they rely on the poor often revised old data that is marketed to us.
Seriously, they have access to all the flows of capital into and out of checking accounts, banking accounts, charge cards, payrolls, international transfers and loan activity. The SWIFT System is pure genius and it is well monitored and gives them insights we could only dream of.
I just hope they want the same things that we do…
Buckle up Buttercup!
<><><><><><><><><>
Delayed? Big deal…they always, always, get adjusted the next month. Maybe they should just wait until they can compile accurate information that does not need to be continually adjusted.
The Feral Reserve risks a credibility crisis if it makes an interest rate decision void of data they have always said they relied on. Worse yet, they risk appearing to bend to President Trump’s calls for lower rates.
The government might be shut down, but the Treasury is still counting them pennies.
We’re up to $37.942T & well on our way to smashing though $38T while TACO lays off a bunch of Fed employees doing the Dems bidding via the Schumer Shut Down ; )
Debt to the Penny | U.S. Treasury Fiscal Data
Meanwhile gold continues to explode because many are asking the correct questions. If America doesn’t have any government, what happens to the dollar? (The answer is not great for the dollar)
The Fed does not serve the interests of the big banks, it serves the interests of the little people.
Do the big banks care about “full employment”? No. Do they care about “stable prices”? No.
The little people care about stable prices, so the Fed is cutting interest rates to make sure price increases continue upward on a stable path towards infinity.
I’d say they care about employment. A debt slave becomes a liability without a job.
The elimination of REG Q ceilings for just the commercial banks was the worst thing that ever happened.
Big banks are the share holders of the FED!
If the Fed threw darts at the board they would do less damage than they do looking at provably wrong data.
Mike, how much of the articles you write are AI generated?
Criminal if they cut in the face of SPX and gold, let alone consumer/producer inflation.
With unemployment at a low 4.3% and inflation running considerably higher than the Fed’s 2% “target”, a further rate cut this month should destroy whatever shreds of credibility the Fed still has as an “inflation fighter”.
It seems to me that the gold (and now silver) market fully realizes that the Fed is now acting as de facto fiscal agent of the US Treasury, enabling the federal government to continue running 2+ TRILLION annual deficits for a while longer. Any name calling and insults Trump throws at Powell is nothing more than theatrics to try to hide the true nature of this arrangement.
They dont want to fight inflation:the pile of debt is only sustainable with high inflation.When they sell you a treasury bill,they pay interest but the amount invested loses value due to inflation.
I mean, how reliable are any of these reports really? Even if they had all reports, and they were accurate, the conditions that produced those statistics have changed and they shouldn’t be trying to drive the economy like a car anyway.
The Fed mostly follows the bond market’s lead. The debt market, like the equity, crypto, gold, commodity, and other easily minutely, hourly, daily tradeable asset, has its own self-ordering growth and decay fractal patterns which are exactly representative of the summation of the asset-debt system’s asset (over)valuations, bad(unpayable) verses good private accumulated debt load, total jobs to support that debt load and further credit expansion, and ongoing cost of living essentials. The latter have been nonlinearly increased by tariffs. Monday, 20 Oct should be a good day for bond holders and facilitate the Fed’s decision to lower the fed funds rate. Gold appears to have reached a peak blow-off valuation today with currently a 1% decline …
It looks like the Fed is keen on repeating all of its policy errors of the 1970s, and then some. The argument runs like this: What looks like demand-driven weakness in the labor market is exclusively due to Trump’s two negative supply shocks (tariffs, immigration), with the SME sector and lower-income workers suffering most of the damage from those shocks. At the same time, the AI boom is fueling excess demand in the economy. In comes the Fed, adding more fuel to the fire by cutting interest rates, but this time (relative to the 1970s) without even knowing what the inflationary pressures really are. Get ready for a second blowout in inflation like in the 1970s (although maybe not in the reported CPI as the Trump administration may well switch to Argentinian-style CPI reporting).
“In comes the Fed, adding more fuel to the fire by cutting interest rates, but this time (relative to the 1970s) without even knowing what the inflationary pressures really are.”
Do you honestly think JPowell & his legion of quants have NO IDEA what’s driving inflation nowadays? Like seriously? You think they’re brain dead like Biden?
I assume you have never been involved in monetary policy making. When you have a mix of adverse supply shocks overlaid with a large positive demand shock, and the impulse response function of each shock with respect to inflation has to be based on guess work (because nobody has ever done stupid stuff like Trump), even a central bank like the Fed will be largely in the dark. That said, there is no need to repeat the obvious policy mistakes of the past.
Albert, you’re not smarter or more informed about monetary policy than the Fed.
FYI – In the 1970’s we didn’t have the debt crisis we’re in right now. We didn’t have a CRE crisis. We didn’t have shadow banks with private equity that’s as enormous as it is right now. Moreover, back in the 70’s, it was a clear problem: oil crisis.
Mostly correct. But we now also have a clear problem: Trump.
Wrong. The FED more than validated OPECs price increases. In the nine years since 1964, the increase in money flows was more than 13 per cent, and in 1972-73, nearly 30 percent
I wonder how this is going to look in the history books. “Before the crisis hit its peak, American investors simply closed their eyes and pretended it was 2005 again.”
The persistent American belief that nothing bad can ever happen to them will have to be studied.
History repeats itself.
The saying is “history may not exactly repeat, but it sure can rhyme”.
It does but I don’t see a recovery this time. We had a lot of momentum then we don’t anymore. China has surpassed us in manufacturing and infrastructure and looks poised to surpass us in tech in the next 15 years. And that’s not counting in the possible states breakup. Turns out market liberalism isn’t exclusive to America anymore. I don’t think we’re ready to actually compete again.
Looks like we will have a large, expensive monument to document this particular stupid moment in history:
https://www.express.co.uk/news/us/2122460/arc-de-trump-unveiled-us-president-shows-off-models-new-crazy-monument
He’s not making it to the end of his term to see it at the rate he keeps telling his base to get screwed.
His base is now the gestapo. They will get paid during the shutdown, as they have been deemed essential. Nobody else matters.
Better than the gestapo –
https://m.youtube.com/watch?v=G3IOBsR7yGM&list=RDG3IOBsR7yGM&start_radio=1&pp=ygURS29taXNzYXIgZXh0ZW5kZWSgBwE%3D
Apparently, taco’s pressure finally got to powell.
A quarter-point point cut means Trump absolutely did not get to Powell.
The Fed can’t stimulate the economy when hiring is being held up by E-verify shutdown.
Outside of AI related spending, the economy is slowing, so the Fed needs to be slowly cutting rates. They’re 3-4 months late due to bad BLS data.
We are in an enormous bubble. Gold is flashing signals that something is very wrong. The slope of margin debt is skyrocketing while the overall amount is approaching $1.2T, compared to just $400B back in July 2007. The FY25 budget deficit once reported will easily come in @ $2.3T, the national debt is expected to be $38.6T by the end of the year.
There are signals all over the place that Private Equity has all sorts of hidden issues just like MBS in the runup to the GR. You’ve still got the extend & pretend CRE crisis. You’ve got auto loans defaulting at rates notably higher than the GR. And you’ve got CARMAX running their own little extend & pretend scheme to keep their repos from going through the roof which will tank their stock price even further. You’ve got rising inflation just like the Fall of 2007 just before the recession hit in December.
Unquestionably, the Fed should be lowering rates. To think otherwise is ludicrous. The question is how much money do they backstop with once the fall gets going?
Massive asset bubble created by low rates can be fixed by lower rates!
Obesity is bad for cognition.
The Fed has a dual mandate. You’ve heard of this, right? Sure, inflation & jobs sometimes can be at odds like right now; however, the Fed clearly said two months ago that they shifted from an inflation centric focus to a jobs centric focus. Apparently, you can’t read or understand what the fed writes or says.
https://www.moonofalabama.org/2025/10/trumps-war-against-left-leaning-groups-extends-further.html
Get out in the street on Saturday if you care!
A bunch of people marching in places that already vote blue. Seems pointless but everyone needs something to do on the weekend.
Totally pointless.
I recall attending an event once. Instead of marching with intelligent signs and behaving like civilized people, “organizers” with megaphones were encouraging people to yell obtuse slogans. Then there was a band playing loud hip music. If their goal was to make the movement look unruly and stupid for any conservatives watching at home, the organizers probably succeeded.
Of course, even if the event was more civil, there are always homeless people milling around anyway. So no matter what a protest group does, the detractors will go interview some homeless guy or a plant if they must.
Gonna go down there and see if I can find a hippy chick with good enough hygiene to bang.
OK if you enjoy hairy armpits
you gonna catch some nasty disease
Sorry, Phil. I know you mean well. But that’s a waste of time.
Everyone must start meeting informally with neighbours and finding a Huckleberry to run for the House.
EVERYTHING ELSE WITH ANY MONEY BEHIND IT is fake-left or fake-right distraction organized by the same small circle of players.
The bastards hijack every organization that grows big enough to matter. Think small, stay small. Organise locally with neighbours.
Similarly, I follow Mish and other journals run by a single journalist. Once a journal becomes anything bigger than “a pothead comedian recording in his garage” like Jimmy Dore, it’s probably already tainted.
… and arm yourselves. The gestapo should be nervous about kicking in people’s doors.
That no longer works. Everyone will just end up sitting around inside their “fixed fortifications” waiting for the inevitable. And soon the no-knock entries will lead with bots.
Unfortunately, nothing works. Even my prescription won’t work, because my advice falls on deaf ears. I couldn’t even convince friends to stop voting for the uni party.
Vote with your feet. … (But to where??)
Somewhere with a defensible perimeter.
Well that’s one way to get a rate cut – shut down the BLS.
And to hide how bad things within the economy might be getting.
If that don’t work, he’ll send in his goons to “search for illegal immigrants”