The Federal Reserve may lose its "radar"! Non-farm and inflation data may not be released on time

Before the start of the new fiscal year on October 1, Congress has less than two weeks to determine the federal government's budgetMaybe.Be the focus of headlines and political conversations. Investors should not overreact, this "shutdown" crisis will eventually pass. US Treasury Secretary Janet Yellen told CNBC on Monday about a potential government shutdown,

"We have a strong economy, and creating something that might cause momentum to wane is a risk we don't need to take right now."

As far as investors are concerned, the government shutdown can be easily handled by the general stock market without too many dramatic events.affectedmaximumDefense companies, some health care companies, and other government contractors.But for the market as a whole, the movements of corporate earnings, interest rates and other macro factors are more significant. Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote on Tuesday:

"While the impact on markets is small in substance, a government shutdown is hard to ignore... Its uncertainty tends to fuel investor anxiety and short-term market volatility, but historical evidence suggests little lasting impact on markets."

Since 1976, the federal government has "shut down" 20 times, with an average duration of eight days, the longest of which was the 2018-2019 shutdown, which lasted 34 days.

according toIndustrial foreign exchangeIn 10 of those shutdowns, the S & P 500 index rose and fell on the other 10. During all shutdowns since 1976, the S & P 500 has returned an average of 0.

There is also a temporary funding deal that could last for a month, giving congressional negotiators more time to hammer out a compromise.However, House Republicans said on September 17 that while an agreement had been reached on temporary funding for the federal government, there was still a "long way to go" to avoid a government shutdown.

The Washington Post reported that the "temporary funding deal" announced by some House Republicans would keep the federal government funded through Oct. 31, while requiring another 1 percent cut in government spending during that period. The cuts are average across departments, with immediate cuts of about 8 percent for agencies other than the Department of Defense and the Department of Veterans Affairs.

The agreement retains most of a border and immigration bill passed by House Republicans earlier this year, and also requires the House to include border and immigration provisions when considering funding for the Department of Homeland Security. Reuters said the agreement did not include President Biden's proposed support for Ukraine. Capital Alpha defense analyst Byron Callan wrote:

"It is conceivable that there will be multiple short-term federal government shutdowns in fiscal 2024, and the probability of continued resolution for the whole year is still expected to be 25%, resulting in a total appropriation for fiscal 24 of about 99% of fiscal 23."

The analyst also pointed out that...Defense Department personnel are scheduled to receive their salaries on October 31, and there is a strong incentive to reach a solution at that time.

There could still be a real or perceived economic impact in the short term. Goldman Sachs economists expect,Every week the federal government shuts down,Maybe.This reduced US GDP growth by about 0.2 percentage points.Although economic activity will resume once the federal government "reopens".

In addition, this time there is another variable related to monetary policy. The Federal Reserve is in the late stages of its tightening operation and is weighing its moves in real time. therefore,In the absence of official statistics from federal agencies, the Federal ReserveMaybe.Choose not to act blindly.

The first affected data will be the September non-farm payrolls report on October 6, followed by the September CPI on October 12.

Fed officials have other sources of information they can use to keep an eye on the economy. These include data collected by states, the ADP's monthly report on private sector employment and non-governmental surveys such as purchasing managers' indices. But they are not as complete as official data.

The Federal Reserve's FOMC committee will announce its next interest rate decision on November 1. Without timely data,What about a "data-dependent" Fed?maximumMaybe.Choose to wait and see.Ian Lyngen, head of U.S. interest rate strategy at BMO, wrote on Wednesday:

"Such an outcome would only exacerbate the long-standing concern that monetary policy relies on a" rearview mirror ". In this scenario, when economic data start to be updated again, the data will only lag more than the status quo."

According to CME "Fed Watch" data, the futures market expects a 33% chance of a 25 basis point rate hike in November, and the government "shuts down"Maybe.Reduce this possibility.