Federal Reserve's Quarles: Lack of Reliable Inflation Data Calls for Caution in Rate Cuts

BlockBeats News, November 6th: Federal Reserve's Quarles said on Thursday that the lack of official inflation data during the government shutdown "further underscored" his cautious stance on further interest rate cuts. Quarles said in an interview, "My bias is that when the current situation is still very uncertain, we should be more cautious and slow down." Quarles pointed out that the Fed can still access various private data on the labor market, including the Chicago Fed's newly launched biweekly unemployment rate estimate. The latest data shows that the October unemployment rate may rise to 4.4%, the highest level in four years.

He stated that this estimate and most other labor market indicators show that "the labor market remains quite stable." "If the labor market starts to deteriorate, we can almost immediately see signs." However, he also mentioned that alternative data sources on inflation are very limited. Before the government stopped releasing economic data, statistics showed signs of rising inflation. He said, "If there is an issue with inflation, there will actually be no corresponding observed data to reflect it, which makes me more cautious about preemptive rate cuts."