Prospects for the Federal Reserve to cut interest rates under pressure from the government shutdown

Kevin Hassett, Director of the National Economic Council of the President of the United States, expressed the opinion that a change in expert opinion on the Federal Reserve's interest rate cuts may not be advisable due to the negative effects of the government shutdown, which, according to his estimates, could reduce gross domestic product by 1.5% in the fourth quarter. Hassett emphasized that the situation on the labor market, where 119 thousand new jobs were added in September, will not compensate for the economic downturn caused by the shutdown.

Source Yahoo Finance

It is worth noting that despite the increase in employment in September, the unemployment rate also rose to 4.4%, indicating that the labor market continues to be unstable. Hassett noted that the lack of a complete picture of the impact of the government shutdown on the economy adds uncertainty to the Fed's decision to cut rates, which some experts are advocating.

Before deciding on changes in monetary policy, the Fed should take into account these changes in the labor market and forecasts for economic growth in an uncertain environment. Hassett's assessment shows that the next steps are important for the stability of the economy and should be considered with the utmost caution.