Payden & Rygel. More rate cuts, not fewer?

Payden & Rygel. More rate cuts, not fewer?

17 november 2025

Rente Fed
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This week, the Federal government reopened after being closed for 43 days, the longest shutdown in history. For financial markets, the government reopening means that the key labor market and inflation data will finally get released, clearing the 'data fog' for policymakers.

However, according to Kevin Hassett, the director of the National Economic Council, the October unemployment rate may not be released, as the Bureau of Labor Statistics has been closed during the data collection period.

We are less worried about data visibility. There are plenty of alternative labor market indicators that allow us to make an unemployment rate call absent the official data. For example, the Chicago Fed's real-time unemployment rate forecast combines official jobless claims data with real-time private sector data, including job openings, ADP employment, and other survey-based measures.

The Chicago Fed's estimate suggests that the unemployment rate may have reached 4.5% in October 2025, nearly a 0.5 percentage point increase from the 12-month low, which has often been an early sign of a recession.

Regardless of which official data becomes available before the Fed's last meeting in 2025, the balance of risks still seems to favor more rate cuts, not fewer.

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