While they are not expected to dissent against a single cut this week, “a third cut might be a step too far,” economists said, especially if state jobless claims remain steady.

This could lead to “at least one hawkish dissent in December, in addition to a likely dovish dissent from Miran," they added. 

If the government reopens by late November, a delayed September jobs report could arrive before the Fed meeting, but “a single strong print will not convince Powell to go back on hold," economists emphasized. 

If data for both September and October become available, a pause could be considered “if the unemployment rate stays flat at 4.3% and activity data are solid.”

Should the shutdown end early enough for the Bureau of Labor Statistics to catch up fully, economists said the Fed’s December decision would hinge on whether the November unemployment rate falls to 4.3% or rises toward 4.5%.

“If we’re at 4.4%, the December decision will be a close call, and will hinge on the broader data flow (including inflation),” they said.

The consumer price index (CPI) rose 0.3% in September, last week’s report showed, putting the annual inflation rate at 3%, slightly below expectations for 0.4% and 3.1%. The year-over-year figure marked a modest 0.1-point increase from August.

Excluding food and energy, core CPI gained 0.2% on the month and 3% on the year, compared with forecasts of 0.3% and 3.1%. That’s a slowdown from consecutive 0.3% monthly gains recorded in July and August.

The CPI report, which solidified the case for another interest rate cut this week, was the only major economic release permitted during the government shutdown.