Core Insights - Inflation increased in September, with consumer prices rising 3% year-over-year and 0.3% month-over-month, slightly below Wall Street's expectations [2] - Core consumer prices also rose 3% annually and 0.2% monthly, again underperforming economist projections [2] Inflation Data - Gas prices saw a significant rise of 4.1% in September, marking the largest monthly increase among tracked items, while overall energy prices increased by 1.5% [3] Federal Reserve Meeting - The Federal Reserve is scheduled to meet on October 28 and 29 to discuss potential interest rate cuts, having previously lowered rates by a quarter-point to a range of 4% to 4.25% [4] - Minutes from the last meeting indicated a division among policymakers regarding the number of additional rate cuts needed, with expectations of rates potentially dropping to between 3.5% and 3.75% by December [4] Employment Data Insights - Job reports have been impacted by a government shutdown, with estimates suggesting a decline in job additions, including a reported addition of only 17,000 jobs in September [5] - The private payroll processing firm ADP indicated a decrease of 32,000 private-sector jobs, the largest drop since March 2023 [5] - The unemployment rate is projected to remain at 4.3% for September, matching August's rate, with Wall Street estimating a higher addition of 55,000 nonfarm jobs [5] Background Context - The Bureau of Labor Statistics (BLS) and the Social Security Administration (SSA) were recalled to produce September's inflation data, which is critical for calculating the annual cost-of-living adjustment for Social Security payments [6] - There are uncertainties regarding the release of other economic data due to the government shutdown, including wholesale price data and unemployment reports [6]

Is there a real market impact uh from a potential government shutdown. As uh Beth Hammock just mentioned, they generally last a few days. Is there a genuine market impact that investors should be mindful of.You know, I think it's going to have a lot of other impacts certainly on the data as she mentioned, but you know, in terms of overall market impact, there have been about seven depending on what you count, shutdowns in the last 40 years, and the market impacts typically been muted. So, I think if we saw ...

Core Viewpoint - The Federal Reserve is navigating a complex landscape of employment data, inflation pressures, and political influences as it considers future interest rate decisions [1][3][10]. Employment Data and the Fed - The Fed's focus on employment data is shifting due to slowed immigration under the current administration, which limits job growth potential [4][5]. - The variability in job growth data complicates economic analysis, as recent employment gains may not reflect true economic conditions without understanding immigration trends [5][6]. Inflation Data and the Fed - The Fed is closely monitoring inflation data, which is influenced by both underlying inflationary pressures and tariffs, making it challenging to determine the appropriate policy response [9]. - Recent inflation trends have raised questions about whether changes are temporary or indicative of a longer-term trend, complicating the Fed's decision-making process [9]. Politics and the Fed's Policies - Political pressures, particularly from President Trump, are influencing the Fed's interest rate decisions, with potential implications for the independence of the institution [11][15]. - The structure of the Federal Open Market Committee (FOMC) allows for political influence, especially if the president appoints members aligned with his agenda [12][15]. Future Interest Rate Decisions - The Fed is likely to continue small interest rate cuts into 2025 and 2026, influenced by recent employment weaknesses and political dynamics [16][17]. - The balance between maintaining the Fed's independence and responding to political pressures will be a critical factor in future interest rate decisions [17].

Meanwhile, getting a news alert out of Washington today. Let's get to Megan Cassella. Hey, Megan.Carl, good morning. This is the Labor Department's Office of Inspector General is now informing the BLS that is initiating a review of the challenges that the BLS faces in collecting some of its most closely watched data. So, in a letter written uh to the acting commissioner of the Bureau of Labor Statistics, the inspector general says they're focusing on two things here.on the challenges and related mitigating ...

Market Overview - US stock market experienced a significant decline, with the Dow Jones Industrial Average dropping 601 points, a decrease of 0.74%. The S&P 500 fell by 0.37%, while the Nasdaq Composite plummeted by 473.75 points, marking its largest drop since April. The total market capitalization of US stocks evaporated by over $1 trillion [1][2]. Employment Data - The US Labor Department reported that non-farm payrolls increased by only 73,000 in July, falling short of expectations. The unemployment rate slightly rose to 4.2%. Additionally, previous months' employment figures were revised down significantly, with May's job additions revised from 144,000 to just 19,000, and June's from 147,000 to 14,000 [5]. Federal Reserve Implications - Due to the disappointing employment data, the probability of a 25 basis point rate cut by the Federal Reserve in September surged from 37.7% to 75.5% [5]. Gold Market Reaction - In response to the market conditions and economic data, gold prices surged over 2%, closing at $3,362.64 per ounce [3]. Political Developments - President Trump criticized the Bureau of Labor Statistics and called for the dismissal of its director, Erica McEntyre, alleging that employment data was artificially inflated ahead of the 2024 elections. He also suggested that Federal Reserve Chairman Jerome Powell should resign [5][6].

Investors in US Treasuries will scour employment data Friday for clearer evidence of a hiring slowdown that could open the door to the Fed cutting interest rates in September https://t.co/4jMhlg79Dv ...

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