The prolonged U.S. federal government shutdown has halted the release of official inflation data, raising concerns among some Federal Reserve officials about future monetary policy decisions. Chicago Fed President Austan Goolsbee expressed growing unease about continuing interest rate cuts in the absence of critical price data during a Thursday interview.

Goolsbee noted that with far fewer private-sector inflation indicators compared to labor market metrics, the Fed has reduced visibility into price trends amid the shutdown. "If inflation starts reaccelerating, it may take time to detect the signs, which makes me increasingly uncomfortable," he said. He emphasized that policymakers must proceed more cautiously when navigating an economic "fog" caused by missing data. "When visibility drops, you slow down," he added.

Last month, the Fed cut rates for the second consecutive time to support a labor market showing signs of cooling after the summer. However, inflation pressures persist, with September’s annual rate at 3%—still above the Fed’s 2% long-term target. Some officials worry price declines may take longer than expected.

Goolsbee singled out the rebound in core services inflation as particularly concerning. These prices, unaffected by tariffs and typically stickier, suggest entrenched inflationary pressures. "This signals ongoing service-sector price pressures that demand vigilance," he said. Excluding energy, service prices rose 3.5% year-over-year as of September.

While official labor data remains suspended, a Chicago Fed real-time unemployment gauge using private-sector data showed October’s jobless rate at 4.36%, nearly flat from August’s 4.35%, indicating no further labor market deterioration.

As inflation data gaps widen and internal Fed divisions deepen, markets increasingly bet on slower rate cuts, especially for December’s policy meeting. Goolsbee’s remarks reflect strengthening hawkish voices within the Fed, contrasting with recent dovish calls for further easing to bolster employment.