Is the Economy Getting Better or Worse? The Fed Says It's Hard to Tell

In this episode of The Journal, Ryan Knutson interviews Nick Timiraos about the Federal Reserve's recent interest rate cut and the challenges it faces due to a government shutdown-induced "data blackout." Timiraos explains that the Fed is like a driver in the fog, lacking reliable economic statistics to guide its decisions, especially regarding inflation and the labor market. The discussion covers the debate within the Fed about whether to prioritize stimulating the job market or fending off inflation, the alternative data sources the Fed is using, and the potential impact of a prolonged shutdown. Timiraos also highlights Fed Chair Jerome Powell's unusually blunt message that further rate cuts are not guaranteed, noting the differing views among committee members and the limited influence of President Trump on the Fed's immediate decisions.