- The BLS faces credibility concerns amid staffing cuts and the shutdown.
- Economists expect 3.1% annual inflation, with no major surprises.
- Limited data complicates the Fed’s next rate-cut decisions.
All eyes are on Friday’s September Consumer Price Index (CPI) report, which could shape market sentiment and Federal Reserve policy decisions. Yet, skepticism is building over the accuracy of the data, as the Bureau of Labor Statistics (BLS) prepares the release amid a partial government shutdown and ongoing concerns about staffing and data collection quality.
Vishal Khanduja, head of broad markets fixed income at Morgan Stanley Investment Management, voiced doubts: “Skeptics like me are going to be focused on how clean is this data… what accommodations were made for the lack of full personnel staff showing up?”
BLS Faces Scrutiny Over Data Integrity
The BLS, long regarded as the “gold standard” for U.S. economic data, has faced mounting criticism this year. Following sharp revisions in job numbers, former Commissioner Erika McEntarfer was dismissed in August by President Donald Trump. Critics argue that the agency’s traditional, labor-intensive data methods — including phone calls and in-person visits — make it vulnerable to disruptions like the current shutdown.
With staff stretched thin and some data collection sites eliminated, analysts worry that Friday’s inflation figures may not reflect the full picture. Citigroup economist Veronica Clark warned that the shutdown’s continuation “makes it unclear how the BLS will deal with an unprecedented lack of real-time collections.”
Moderate Inflation Expected, but Market Impact May Be Muted
Despite the concerns, economists don’t expect major surprises. The Dow Jones consensus sees CPI rising 3.1% year-over-year, with monthly increases of 0.4% for headline and 0.3% for core inflation — roughly in line with August data.
However, with other economic releases paused, the CPI will be one of the few signals available to both investors and the Fed. This limited visibility complicates the central bank’s upcoming policy meeting, where a quarter-point rate cut is widely anticipated.
Policy Uncertainty Looms Ahead
Looking beyond this month, uncertainty deepens. Trump’s push for lower interest rates and a potential successor to Chair Jerome Powell could shift the Fed’s long-term trajectory. Yet without reliable data, crafting a sound policy path may prove difficult.
Also Read: Peter Brandt Warns of 75% Bitcoin Crash as BTC Nears $110K Ahead of Key CPI Report
As Morgan Stanley’s Mike Wilson put it, “I don’t think we’re going to learn a whole lot from this CPI data… It will give the Fed cover to cut, but the risk is that we won’t get the clarity needed for more meaningful action.”
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
