BAF NEWS

Zoom in: The data tap is only half open.

According to available reports, shutdown‑delayed releases are restarting unevenly. The Bureau of Labor Statistics plans to publish the delayed September jobs report this Thursday, but some October reports may be skipped entirely. Reuters adds it is unclear how much official data will be out before the Dec. 9–10 meeting. “BLS said it would publish the delayed employment report for September on Thursday,” and “some of the October reports may be skipped altogether,” the wire reported. It also noted, “it remains unclear how much official data we will see before the December 9-10 Fed policy meeting.”

By the numbers:

• 43 days: length of the federal shutdown that delayed major indicators.
• Dec. 9–10: dates of the next FOMC meeting.
• 25 basis points: the size of the October cut and the move some officials still prefer in December.
• Thursday: expected release of the delayed September jobs report.

Fed Policy Divide Intensifies

However, the policy split is stark. Several governors lean toward easing again, while a number of Reserve Bank presidents stress inflation risks. Chair Jerome Powell underscored the uncertainty, saying a further reduction “is not a foregone conclusion, far from it.”

Moreover, public remarks highlight competing readings of the same backdrop. The Financial Times notes that some officials emphasize inflation still near 3% and resilient growth, while others see rising labor‑market slack. Consequently, communications point to a meeting where consensus may be fragile.

Governor Waller’s Call for December Rate Cut

Governor Christopher Waller has planted a clear flag. “I support cutting the Committee’s policy rate by another 25 basis points at our December meeting,” he said, framing the move as risk management. In his view, the labor market is “still weak and near stall speed,” and underlying inflation, excluding tariff effects, is close to 2%.

Importantly, Waller argued the committee is not “in a fog” despite the data outages. He pointed to private indicators showing rising unemployment claims and easing wage pressures. But he also warned that razor‑thin votes can unsettle market expectations about the path ahead.

Vice Chair Jefferson’s Cautious Approach

By contrast, Vice Chair Philip Jefferson is counseling patience. He supported last month’s quarter‑point cut as risks tilted toward employment. Yet he says policy “should proceed slowly” as the stance approaches neutral, and decisions should remain meeting‑by‑meeting.

Additionally, Jefferson notes the same data gaps complicate judgment. He described the current stance as “still somewhat restrictive,” though closer to neutral, and highlighted a “sluggish” labor market with firms hesitant to hire. Therefore, he prefers a careful pace as more data arrive.

October Meeting Reveals FOMC Disagreement

The split is not hypothetical. The Oct. 28–29 decision saw dissents in favor of both more easing and more restraint. Upcoming minutes may shed further light on the internal debate.

Implications for December Policy Decision

Consequently, the December choice looks harder, not easier. The committee faces missing official readings on inflation and jobs, even as private indicators flash mixed signals. Moreover, the leadership’s tone is cautious, and the votes could be tight.

Pros and cons, as they stand:

• Case for cutting: The labor market appears fragile, with claims edging up and wage pressure fading; underlying inflation is near target, excluding tariff effects. A modest cut may reduce downside employment risks.
• Case for pausing: Some officials still see inflation uncomfortably high and growth resilient. Proceeding too fast could reignite price pressures or complicate credibility.

The upshot: Markets should expect a data‑dependent debate with little preset path. Powell has already emphasized that nothing is guaranteed. With divisions this visible, the statement, projections, and press conference will carry extra weight.

What’s next: Watch Thursday’s jobs report for September and any catch‑up inflation releases. Also watch speeches for shifts in language around “neutral,” which Jefferson says the stance is approaching. Finally, expect the minutes and staff briefings to be parsed for how officials balance employment risks against inflation risks amid incomplete data.