Lack of Data Slows Down Fed’s Rate Cutting: Powell

At a recent press conference, Federal Reserve Chairman Jerome Powell answered questions from reporters about how the government shutdown is affecting the central bank’s decision-making, Grace O’Donnell reported for Yahoo Finance.

Powell acknowledged that the lack of data could make the Fed more cautious in its December meeting. (Photo: Federalreserve Flickr)

The Fed cut interest rates by 25 basis points at its October meeting, as expected, even as the shutdown has deprived central bank policymakers of some of the gold-standard government data they typically rely on.

“This is a temporary state of affairs,” Powell said (watch the full press conference below).

“We’re going to collect every scrap of data we can find, evaluate it, and think carefully about it. And that’s our job. That’s what we’re going to do.”

Powell explained that the Fed will continue to look at other sources of information, such as the Fed’s Beige Book and private data.

He noted that the Fed may not have a “very granular understanding of the economy while the data are not available,” but that it would pick up on “material developments” in the economy.

Still, Powell acknowledged that the lack of data could make the Fed more cautious in its December meeting.

“If you ask me, could it affect the December meeting?” Powell said. “I’m not saying it’s going to, but yeah, you could imagine that.” He concluded: “If you’re driving in the fog, you slow down.”