- ANALYSIS: Despite data showing the labor market may have weakened during the government shutdown, Federal Open Market Committee (FOMC) members have struck a cautious tone in recent weeks. This is cooling expectations for a final rate cut in 2025, as the Fed balances sticky inflation and uncertainty with its need to maintain full employment. Markets have maintained some positive momentum on hopes the U.S. government shutdown will soon draw to a close.
As the government shutdown has rumbled on, a dark cloud is looming increasingly large over the economy. The labor market (at least according to available data sets) shows signs of weakening, presenting a conundrum for members of the Federal Open Market Committee (FOMC).
