ICYMI – Morgan Stanley says government shut down will lead to Fed Reserve policy paralysis

Morgan Stanley says that a full government shutdown will halt the flow of economic data, leaving the Federal Open Market Committee (FOMC) in the dark over the economy

  • “In monetary policy making, uncertainty tends to lead to policy paralysis,”
  • “If it’s a full government shutdown, then you don’t really get any of the government data,”
  • “And so if we’re lacking data that the Fed can officially sink its teeth into, then that’s going to lead to an inability to make a decision about the path for rates. The lens of the Fed becomes foggy.”

The comments are from MS’ Ellen Zentner in a Bloomberg TV interview.

Congress will shut down next weekend a deal is not struck. Hardline Republicans are calling for tighter spending controls, a significant hurdle in reaching an agreement to get the legislation passed.

This article was written by Eamonn Sheridan at www.forexlive.com. Source