Government Shutdown and Halted Data Releases
The United States has entered a government shutdown after Congress failed to pass funding, which has suspended the release of key economic data such as the monthly jobs report. Markets are temporarily relying on private sources instead of official statistics, and while the immediate impact on credit ratings appears limited, a prolonged shutdown heightens uncertainty, delays the publication of vital data used by investors, disrupts economic monitoring, and increases market volatility until official reporting resumes.
Signs of Labor Market and Manufacturing Slowdown with Easing Monetary Policy
In the absence of the official jobs report, private data drew attention after showing a decline in private-sector employment, and the manufacturing index remained below the expansion threshold, signaling continued economic softness. In this context, the Federal Reserve cut interest rates in September and hinted at further easing if the slowdown persists and inflation remains contained, making the interest rate outlook the key factor shaping market sentiment in the coming weeks.
Market Reaction: Lower Yields and Cautious Risk Appetite
The market responded swiftly, with Treasury yields dropping as traders bet on deeper rate cuts, and equities fluctuated yet showed resilience in major indices. The dollar and gold remain influenced by the combination of missing official data and monetary policy expectations, and overall, the longer the shutdown continues, the greater the uncertainty, the weaker the accuracy of real-time economic readings, and the higher the market sensitivity to alternative data releases or new developments in government funding.
