Fed Rate Cut Uncertainty Rises After Jobs Data Delay

Uncertainty around a potential Federal Reserve rate cut has increased after a U.S. government shutdown forced the delay of critical labor market data. The Bureau of Labor Statistics (BLS) confirmed it will not release the January 2026 jobs report as originally scheduled, complicating the Fed’s data-driven approach ahead of its March policy meeting.

According to CNBC, the BLS halted the release of the January employment report due to the partial government shutdown that began after Congress failed to pass a funding bill. Emily Liddel, associate commissioner at the BLS, stated that the report will only be published once government funding is restored. The January jobs report is a key input for Federal Reserve policymakers, as it includes nonfarm payrolls, unemployment rates, and household employment data that help assess labor market strength.

Prior to the delay, markets expected job growth of around 55,000, with the unemployment rate holding steady at 4.4%. However, the shutdown has disrupted more than just payroll data. The BLS also postponed the Job Openings and Labor Turnover Survey, while releases for inflation data such as CPI and trade figures may also face delays. It remains uncertain whether the Commerce Department will encounter similar reporting disruptions.

With the March Federal Open Market Committee meeting approaching, the absence of fresh labor data has increased caution around a potential Fed rate cut. Policymakers may now rely on December employment figures, weekly jobless claims, and private sector employment surveys. As a result, market expectations have shifted. Polymarket data shows the probability of no rate change in March has climbed to 90%, while odds for a 25 basis point rate cut have fallen to 8%.

The Fed recently held interest rates steady, reiterating its commitment to a data-dependent strategy. The missing jobs report further reduces the likelihood of policy changes without clear evidence of labor market trends. Adding to uncertainty, President Donald Trump has nominated Kevin Warsh as the next Fed chair once Jerome Powell’s term ends in May. Warsh’s historically hawkish stance and support for a strong dollar could influence future rate decisions and impact risk assets such as Bitcoin.

Despite near-term caution, crypto markets continue to price in multiple rate cuts later this year, reflecting ongoing political pressure for lower interest rates and evolving economic conditions.