US government shutdown could cause tapering confusion
US Federal Reserve calculations over the beginning of tapering – a scaling back of its asset purchases program – could be hampered by fiscal squabbles over the Federal debt ceiling.
Fed chairman Ben Bernanke has already referred to the lack of clarity as a hindrance on monetary policy decisions:
The extent of restrictive fiscal policies remains unclear, and upcoming fiscal debates may involve additional risks to financial markets and the broader economy.
Now a government shutdown could threaten the availabilty of data on which the Fed can make it decisions. The US' central bankers have been keen to stress that all decisions are data dependent.
Markets have been confused by data issues with jobless claims, as computer issues plague releases. If tensions between the GOP and Democrats aren't resolved – the monthly nonfarm payrolls and unemployment rate figures may not be released at all.
@ChrisWeston_IG points out if we see government shutdown,we wouldn't get the Oct 4 non-farm payrolls – so important to the taper jigsaw
— Carolin Roth (@CarolinCNBC) September 26, 2013
That's going to mean even less clarity for the Fed, and as a result, more uncertainty for markets.