This wave of official data releases from the US directly disrupted the entire market rhythm.

The government shutdown lasted 43 days. In November, the Labor Department suddenly released unemployment data, and the results were mixed—some happy, some worried. Initial jobless claims were mostly revised upward, with the week of September 20th increasing from 218,000 to 219,000, while continued claims remained stuck at 1.957 million, indicating a harsh reality: it’s becoming increasingly difficult for unemployed people to find jobs.

Even more painfully, data for 6 weeks after the release simply "disappeared." During the shutdown, household surveys couldn’t be conducted, causing a significant gap in unemployment rate statistics. Previously, the market relied on ADP private sector data or AI models for estimates, but once the official data was released, most previous forecasts were rendered useless—indicating that the cooling of the employment market is much more severe than everyone imagined.

Inside the Federal Reserve, this has caused a complete split. Doves (like New York Fed President Williams) see the widening employment gap and are eager to cut interest rates; hawks (like Board members Bostic) insist that inflation is still above 3% and believe that loosening policy now would be too risky. The key issue is that the data black hole leaves both sides without confidence in what is correct. Vice Chair Jefferson simply shrugged and announced that policy can only be "gradually advanced."

Market reactions are very direct. The probability of a rate cut in December, which was previously estimated at 85%, has now fallen to 44%. What does this contrast tell us? It means no one dares to be certain that the Federal Reserve will actually cut rates next. If you had to say, compared to the constant arguing among these officials, it’s more telling to look at how quickly ordinary investors’ accounts have recently shrunk.

The August CPI year-over-year looks moderate at 2.9%, but the inflationary pressure from tariffs has been simmering beneath the surface. The Fed now feels caught between worsening employment and persistent inflation, with policy space squeezed tightly. How the market will move next depends on everyone’s bets on what the Fed will ultimately choose.