What’s going on here?

The US dollar slipped 0.5% against major peers as a government shutdown froze official jobs data, leaving investors to lean on private reports at a critical moment for Fed policy.

What does this mean?

Usually, government-issued data like non-farm payrolls help guide investors’ views on the US economy, but the shutdown has kept those reports off-limits for now. Instead, investors sifted through private data—like Challenger’s surge in layoff announcements, especially in government and retail—showing a cooling labor market as firms cut costs and ramp up artificial intelligence investment. According to Westpac, this uptick in job cuts and the absence of official data has traders betting there could be a Federal Reserve rate cut as soon as next month. The CME FedWatch tool now puts the odds of a December rate cut at 70%, up from 62% a day earlier. Still, the Chicago Fed president warned on CNBC that acting without verified inflation figures means policymakers need extra caution. Globally, currencies mostly held steady: the dollar edged up on the yen after Japan reported sluggish household spending, and the Bank of England kept UK rates unchanged in a close vote, with Governor Bailey casting the deciding vote.

Why should I care?

For markets: Markets on edge as data blackout reshapes expectations.

With the usual government data out of the picture, traders and investors are turning to private indicators and forecasts to make sense of economic momentum. That has driven up the chances of a December Fed rate cut and added fresh volatility across currency and bond markets. Expect sharper swings for stocks and currencies as market players adapt to unexpected data gaps and shifting interest rate bets.

The bigger picture: Policy decisions grow thornier as official insights dry up.

The US shutdown is exposing just how dependent monetary policy is on reliable, timely data. Private sector reports have stepped in, but they aren’t a perfect substitute for credible public figures. Meanwhile, the Bank of England’s close call on rates and ongoing UK tax debates reveal a global economic landscape grappling with weak growth and fiscal stress—leaving policymakers to make some big moves with less-than-complete information.