Expert: Delayed CPI data could complicate Fed’s next rate decision

Newswise — As the Federal Open Market Committee prepares to meet on October 28–29, the recent government shutdown has delayed key economic reports, raising concerns about the reliability of the data guiding the Fed’s next move.

Virginia Tech finance expert Brad Paye says the postponed release of the Consumer Price Index (CPI) — a critical measure of inflation — could make monetary policy decisions more uncertain than usual.

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“The shutdown has halted or slowed the production of key economic data that committee members rely upon to make monetary policy decisions. It will be especially difficult for the Fed to get an accurate read on current employment conditions due to shutdown-driven delays in jobs reports from the Bureau of Labor Statistics,” said Paye. “Absent this information, it is likely that the Fed will hew to its prior assessment that labor market risks outweigh inflation concerns and proceed with an additional quarter-point rate cut.”

TOPICS

Paye can speak to the implications of the Fed’s decision on prices, market volatility, and portfolio strategies for everyday investors and retirement accounts. He has published an opinion column in the Richmond Times-Dispatch and was quoted in a Yahoo Finance article on how the Fed’s messaging reveals that language from policymakers often moves markets more than the rate change itself.

About Paye

Brad Paye, an associate professor of finance in Virginia Tech’s Pamplin College of Business, studies the intersection of financial markets and macroeconomic conditions. His research includes asset pricing, volatility modeling, and forecasting, offering in-depth insights into how economic data quality influences market expectations and monetary actions.

Schedule an interview

To schedule an interview, contact Margaret Ashburn at mkashburn@vt.edu or 540-529-0814, or Marc Kaplan at marck@vt.edu or 646 244-2169.