The Post‑Shutdown Reset: How Delayed Data, Rising Yields and Fed Ambiguity Are Rewriting December Rate Odds
Markets just experienced their sharpest one-day pullback in a month as the odds of a December rate cut were repriced from a near lock to a coin flip. The shift is not happening in a vacuum. It reflects a rare confluence: a government shutdown that has impaired the flow of official economic data, a Treasury market where long yields have firmed, and a Federal Reserve whose public messaging has turned noticeably split. The result is a new regime of uncertainty. Stocks are recalibrating, volatility is higher, and cross-asset signals point to valuation adjustment rather than panic. With the White House signaling that October inflation and jobs data may never be published, investors and policymakers are flying with instruments—private indicators, high-frequency activity metrics, and market-based expectations—while acknowledging their limits. The next four weeks will be defined by what data does and doesn’t arrive, how the 10-year yield behaves, and whether the Fed’s internal debate resolves toward a pause or a smaller-than-assumed cut.