White House Warns Shutdown May Permanently Halt Inflation, Employment Data...Concerns Over Fed's 'Blind' Monetary Policy

Caroline Levitt's Briefing
Uncertainty in Monetary Policy Deepens Amid Economic Data Void

The White House announced on November 12 (local time) that, as a result of the federal government shutdown (temporary suspension of government operations), key economic indicators such as inflation and employment figures for October may not be released to the public permanently.

Caroline Levitt, White House Press Secretary. Photo by Yonhap News Agency

Caroline Levitt, White House Press Secretary, stated during a briefing that day, "The Democratic Party has inflicted permanent damage on the federal statistical system," adding, "There is a high possibility that the Consumer Price Index (CPI) for October and the employment report may not be released at all."

She went on to say, "All economic data may have been permanently compromised," and added, "Policymakers at the Federal Reserve will be forced to act without any information at a very critical time."

As the U.S. Congress failed to reach an agreement on the budget for the 2026 fiscal year, the federal government entered a shutdown starting on the first of last month. As a result, the release of inflation and employment indicators by the Bureau of Labor Statistics (BLS) under the Department of Labor has been delayed.

After the Senate passed a temporary budget bill on the 10th, raising expectations in the market that the shutdown would soon be lifted, there was growing anticipation that the October CPI and the employment reports for September and October would be announced soon. However, on this day, Press Secretary Levitt indicated that the government's data collection had been severely affected by the shutdown, suggesting that some indicators may not be published permanently.

Levitt also criticized the opposition party, stating, "The Democratic Party's shutdown has made it extremely difficult for economists, investors, and Federal Reserve policymakers to access crucial government data," placing responsibility on the opposing party.

The Federal Reserve is scheduled to hold its regular Federal Open Market Committee (FOMC) meeting on the 10th of next month to decide the benchmark interest rate. With the labor market recently slowing and the Fed having cut rates twice in a row since September, there is currently a sharp divide within the monetary authorities between those advocating for further rate cuts and those favoring a hold. However, if inflation and employment indicators are not released on time, the Fed will be forced to make its decision amid an information vacuum. This has raised concerns that monetary policy may not be able to respond appropriately to macroeconomic conditions.