Fed expected to cut rates again, even as officials fly blind without data

Economic Indicators - The Consumer Price Index indicated a slight cooling of inflation in September, with core inflation rising by 3%, down from 3.1% in the previous month, and a month-over-month increase of 0.2% after a 0.3% rise in the two preceding months [1] - Job growth in the private sector totaled 157,000 from May to August, with healthcare adding 249,000 jobs, while other sectors combined lost 92,000 jobs [3] - The average job growth for September was reported at just 13,000, with ADP indicating a decline of 32,000 in private payroll employment [4] Federal Reserve Actions - The Federal Reserve is facing challenges in making monetary policy decisions due to the government shutdown, which has delayed the release of critical job data [5][7] - Fed officials are expected to cut the benchmark interest rate by a quarter percentage point for the second time this year, despite the lack of official job data [6][10] - Policymakers have indicated a median estimate of two more rate cuts for the year, with markets anticipating a cut this week and potentially another in December [20][21] Labor Market Insights - The labor market is showing signs of softening, with concerns that it may not recover soon, as indicated by various data sources [2][9] - Delinquencies in subprime auto loans have raised concerns about the overall health of the economy, although some analysts do not see this as an early sign of a financial crisis [14][15] - Analysts suggest that the Fed needs to be cautious about inflation numbers, as persistent inflation could complicate future monetary policy decisions [12][19]