Mint Quick Edit | It’s not easy for the Fed to set monetary policy with a data blindfold

Since America’s government has been in shutdown for almost a month, few official numbers have been released. Inflation data was, but the Fed has had the job market under watch and its chair Jerome Powell has been a proponent of evidence-based policymaking.

So, its October policy call would be anything but usual. Still, expectations of a rate cut have been high. Job generation was probably weak, while inflation last month was 3%, just a percentage point above the Fed’s target and far from the sticker shock-wave some had predicted in the wake of tariffs.

There are also signs of trade uncertainty having cast a cloud on growth impulses. Though the US seems close to striking a deal with China, possibly even India, the disruptions caused so far may hurt GDP expansion.

Powell has been under quite some White House pressure to ease rates too, but it’s ultimately about what serves the economy well. And as monetary policy acts with a lag, we can usually judge its aptness only in retrospect.