Fed's Waller: The US government shutdown makes the subsequent policy path more uncertain

According to Odaily Planet Daily, Federal Reserve Board Governor Waller expressed support for further interest rate cuts later this month, but due to the ongoing government shutdown and the lack of official economic data, the subsequent policy path remains highly uncertain. Waller stated that the economic outlook still presents conflicting signals. Economic growth appears to remain strong, but the labor market has become noticeably tighter for workers. Waller noted, "Because we do not yet know how the data will evolve, the Fed needs to proceed cautiously when adjusting its policy rate to avoid making costly mistakes that are difficult to correct." He also pointed out that the specific timing of the rate cut and policy decisions after October remain fraught with uncertainty. "The policy path after October will depend on how the contradictions between economic activity and labor market data are resolved, as well as the trajectory of inflation expectations." He added that the government shutdown has further complicated the Fed's decision-making environment. The shutdown itself may bring about short-term economic fluctuations, but once the economy reopens, it will recover quickly. However, if the shutdown lasts too long, it will weaken economic growth potential and slow the recovery process. (Jinshi)