Impact of Government Shutdown on Economic Data
The US government shutdown negatively impacted all sectors, including cryptocurrencies. The Federal Reserve was unable to access key economic data on which it bases its interest rate decisions during the shutdown. This situation increased uncertainty surrounding the December interest rate decision.
Richmond Fed President's Stance on December Rate Cut
At this point, while expectations that the Federal Reserve will cut interest rates in December continue to decline, important statements came from Richmond Fed President Thomas Barkin. According to Reuters, Thomas Barkin said that the interest rate cut in December is not certain and no decision has been made on the matter yet.
“As Chairman Jerome Powell has stated, a December rate cut is not yet a given.”
Speaking at an event in Virginia, Barkin noted that inflation is above the Fed's 2% target but is not expected to rise further. He also indicated that the unemployment rate will rise, but not significantly.
Barkin expressed hope that upcoming data will help clarify the economy's direction and assist the Fed in making its decision. He stated that more information will be obtained on critical economic data that has been postponed until the Fed's next meeting. He also emphasized that it is difficult to achieve a consensus within the Fed without convincing data.
Barkin further elaborated on the current economic outlook:
“I don't think we're on target for our 2 percent target on any of our variables. However, I do not think that the negative aspects are that important. I'm not from a standpoint on either side to say, 'Oh my God, we have to panic.'”
Market Expectations for the December Interest Rate Decision
The US Federal Reserve is scheduled to announce its final interest rate decision for the year on December 10th at 10:00 PM Turkish time. Market participants remain divided on whether the Fed will implement an interest rate cut. Currently, a 25 basis point cut is priced in at 48.9%, while the probability of leaving interest rates unchanged stands at 51.1%.