Former Boston Fed President Rosengren: The Fed will have to rely on 'noisier' data during shutdown

Economic Data & Monetary Policy - Government shutdown paused the release of key economic data, including the jobs report and upcoming inflation reports, creating uncertainty for the Federal Reserve's monetary policy decisions [1] - The absence of federal government economic data forces the Fed to rely on noisier data sources like initial claims and the ADP report, which are less reliable than the BLS report [3] - The stock market's positive reaction to the shutdown is likely driven by expectations of lower interest rates, potentially leading the Fed to ease by another 25 basis points due to concerns about the labor market [8][9] - Uncertainty from government shutdowns and potential permanent layoffs could negatively impact consumer confidence and slow down the economy more than anticipated [16] Banking & Mergers - A new deal involving Comerica and Fifth Third, with Fifth Third acquiring Comerica for over $10 billion, will create the ninth-largest bank in the country, reflecting a changing regulatory environment [9] - There's an incentive for banks to merge to achieve economies of scale, particularly for implementing expensive technologies like AI, suggesting a potential wave of regional bank mergers in the coming years [11] - As larger regional banks emerge, it's crucial to consider financial stability and whether these institutions become "too big to fail," requiring appropriate regulation to mitigate potential risks to the overall economy [13]