It wasn't supposed to be too important. The Federal Reserve's first interest rating setting meeting of 2019 wasn't expected to have much mystery surrounding it.
The outcome of the two-day meeting in the week ahead really isn't in question. How it gets there is.
The partial government shutdown could gum up the Fed's carefully scripted economic forecasts, and the central bank's exhaustively cultivated posture. Its independence is not at risk, despite President Trumps Twitter tantrums. Instead, the agency's long stated data-dependent approach to monetary policy vulnerable.
The Fed itself continues gathering economic data during the partial shutdown, but other pieces are missing; trade, new home sales, construction spending, durable goods orders, and personal income are missing. The first look at the fourth quarter GDP originally was scheduled to be released Wednesday, the same day the Fed finishes its interest rate meeting. While the bankers will deliberate, they won't have all the data they normally would have.
After raising its target short-term interest rate four times in 2018, the most recent hike in December, the bank already had been expected to slowdown rate hikes this year even before the government shutdown.
Through its regional banks, the Fed has access to a wealth of economic data, but it doesn't have a monopoly on statistics. Two weeks ago, four of the 12 regional Fed bank presidents said they were patient about any future rate hikes. They also expressed the need for clarity on the economy.
With reams of government data missing or delayed, investors will want to hear from the Fed where that clarity is coming from in the weeks ahead.
