Fed rate cut uncertainty has increased after the U.S. government shutdown forced a delay in key labor data. The Bureau of Labor Statistics halted the January jobs report release. The delay directly affects Federal Reserve decision-making ahead of its March meeting, where policymakers assess employment conditions before adjusting interest rates.
Fed Rate Cut Complicated by Jobs Data Delay
According to a CNBC report, the Bureau of Labor Statistics confirmed it will not release the January 2026 jobs report on February 6 as scheduled. Emily Liddel, associate commissioner at the BLS, said the report will be released only after government funding resumes. The delay follows the partial shutdown that began Saturday after Congress missed a spending deadline.
The January jobs report is important to the Fed’s rate decisions. The release includes nonfarm payrolls data, unemployment rates, and household employment surveys. Markets had expected job growth of 55,000, with unemployment holding steady at 4.4%.
However, the U.S. government shutdown halted more than payroll data. The BLS also postponed the Job Openings and Labor Turnover Survey, along with CPI and trade data. Meanwhile, it remains unclear whether the Commerce Department will face similar reporting delays.
House Speaker Mike Johnson said over the weekend he expects the funding impasse to be resolved by Tuesday. One major disagreement involved Department of Homeland Security funding following immigration-related unrest.
How the Jobs Delay Affects March Fed Rate Cut Odds
The Fed’s next policy meeting is scheduled for March. Without January labor data, policymakers may rely on December figures and alternative indicators. These include weekly jobless claims and private employment surveys.
As a result, caution has increased around a March Fed rate cut. As per Polymarket data, odds for no rate change are at 90%, up by 33% following the delay. Odds for a 25 basis point cut are at 8%, while larger cuts remain below 10%.
Source: Polymarket
As CoinGape reported, the Federal Reserve held rates steady at last week’s FOMC meeting. Officials emphasized a data-dependent approach, making the missing jobs report more important. The delay reduces the chance of policy shifts without clear labor trends.
Trump, Warsh, and Broader Rate Expectations
U.S. President Donald Trump nominated Kevin Warsh as the next Fed chair once Jerome Powell exits in May. However, it remains unclear whether Warsh would support rate cuts. Warsh previously backed a strong dollar policy. That stance could pressure risk assets, including Bitcoin, which traders often view as a hedge.
Despite Warsh’s perceived hawkish position, crypto markets still price in three rate cuts this year. Political pressure for lower rates persists. However, the Fed continues to weigh inflation, employment stability, and economic data gaps caused by the shutdown.
Source: https://coingape.com/fed-rate-cut-uncertainty-mounts-as-bls-delays-jobs-report-amid-shutdown/
