Group 1 - Policymakers are expected to maintain the federal funds rate between 3.5% and 3.75% after the upcoming meeting, with traders anticipating one to two quarter-point reductions this year [3] - The core consumer price index rose by 0.2% in December and 2.6% for the entire year, matching a four-year low [4] - The Federal Reserve's preferred inflation measure is projected to fall below the 3% forecast for 2025, with the personal consumption expenditures price index (excluding food and energy) rising by 2.8% in November [6] Group 2 - President Trump has been advocating for more significant interest rate cuts, suggesting a reduction to as low as 1%, claiming that current rates hinder economic success [5] - The Beige Book report indicates moderate price growth across most of the Fed's districts, with only two districts reporting slight price increases [5][6] - Economic analysts expect inflation to continue to undershoot the Federal Open Market Committee's expectations this year due to low tariff revenues and signs of slowing wage growth [6]

Core Insights - The U.S. Bureau of Labor Statistics (BLS) has canceled the release of the October consumer price index (CPI), impacting the Federal Reserve's ability to assess inflation data before its interest rate decision on December 10 [1][2] - The cancellation is due to the government shutdown, which hindered the BLS's ability to retroactively collect necessary survey data [2][3] - The release of November's CPI data has been rescheduled to December 18, after the Fed's decision [2] Data Collection Challenges - BLS data collectors utilize various methods, including personal visits and phone calls, which were not feasible during the shutdown [3] - Online data and household surveys also contributed to the difficulties in retroactively collecting information [3] Impact on Federal Reserve - The Commerce Department's Bureau of Economic Analysis has also indicated that the personal consumption expenditures (PCE) price index, another key inflation measure, will be rescheduled without a firm date [4] - Fed officials have expressed concerns about operating in a "data fog," complicating monetary policy formulation [5] - Fed Chair Jerome Powell emphasized the need for caution in decision-making during this period of uncertainty [6] - Despite the data challenges, some Fed officials believe there is still sufficient information to make informed decisions [7]