The Fed Will Fly Blind During the Government Shutdown

October 7th, 2025
James Savin

President Trump is increasingly escalating his attacks on the Federal Reserve (Fed). His most recent attack came through an announcement stating that the Bureau of Labor Statistics would be designated non-essential during the government shutdown, removing the Fed’s access to the vital statistics that enable decision-making.

Trump’s gripe with the Federal Reserve Chairman Jerome Powell dates back to 2018, only two years after Trump appointed him to the position in his first term. Trump tried, and failed, to pressure Powell to cut rates during his trade war with China, calling the Fed and Powell the “biggest threat” to his economic agenda. His disdain for Powell grew more extreme during his second term campaign, as he suggested that the Fed cut rates in the final stretch of the 2024 election cycle in a politically motivated push against Vice President Harris. Presidents have put pressure on the Fed to cut rates since it was first formed in 1913, striving for low interest rates that would decrease costs for consumers. However, Trump’s attacks on the Fed’s independence as an institution have been unprecedented. Trump has called Powell a “numbskull,” and coined the term “Too-Late Powell” to refer to him in reference to his belief that Powell takes economic action too late. Despite high pressure from Trump to cut, the Fed has held firm, only recently cutting rates a quarter of a percentage point—the first cut since December of 2024—citing a weak labor market. This, still, was not a satisfactory cut to Trump, who was pushing for a rate as low as 1%–a more than 75% cut from the current rate of 4.25%.

The Federal Reserve decides when and by how much to cut rates, taking into account multiple economic factors, the most important of which are the inflation rate (measured by the CPI) and employment statistics. This data is tracked, compiled and released by the Department of Labor’s Bureau of Labor Statistics. The Fed has a target inflation rate of 2% that it adjusts rates to keep, cutting when inflation falls below and raising rates when inflation rises. Other factors, such as employment rates, also play a significant role, but inflation is by far the most important consideration in the Fed's decision-making process. The Fed has refused to significantly lower rates despite Trump’s pressure as the CPI hovered at around 3% in the first months of the Trump presidency; dipping down to a low of 2.3% in April; and climbing back up to 2.9% in the following months.

On September 26, the Department of Labor released a contingency plan for how it would function in the event of a government shutdown, officially acting upon it at midnight, September 30. The plan stated that, “BLS will suspend all operations… Economic data that are scheduled to be released during the lapse will not be released.” This includes scheduled releases such as the October 15th monthly release of the CPI, which will now be held back until the end of the shutdown. The report also noted that “all active data collection activities for BLS surveys will cease,” meaning that not only would the Fed be deprived of vital statistics until the indefinite end of the shutdown, but it would also be without accurate economic information up to a month or more after the shutdown is completed. The Federal Reserve will be flying blind at its next convention on October 28, putting the US economy in a precarious situation, as it struggles to maintain its internal processes and the Fed fights for its independence.