The shutdown of the U.S. federal government has led to chaos in the release of economic data, with the highly anticipated September non-farm payroll report missing its scheduled publication for the first time. This report has always been an important basis for the Fed in formulating policies. However, signs of a weakening job market have begun to emerge. The latest data shows that the number of initial unemployment claims rose to 224,000 last week, while the ADP private employment data also fell short of market expectations, all of which confirm that the labor market is experiencing a trend slowdown.

In response to these signals, the market quickly reacted, interpreting them as potential hints of an interest rate cut. According to data from the Chicago Mercantile Exchange (CME), the market's expectation of a 25 basis point rate cut in October has surged to 94.6%. This expectation has also triggered a synchronized response in assets such as gold and U.S. Treasury bonds.

However, there is a clear contradiction behind the expectation of interest rate cuts. There are significant divisions within the Fed, with hawkish members concerned about the persistence of inflation, while doves focus more on the risks of slowing economic growth. More importantly, due to the government shutdown, the Fed's meeting in October will face the challenge of insufficient official data support. If subsequent economic data shows a reversal, it may trigger severe market fluctuations.

In fact, the prevailing expectation of interest rate cuts in the current market is essentially a reactive response to the dual uncertainties regarding economic outlook and policy direction. In this complex economic environment, the Fed's decision-making will be further tested in its wisdom to seek a balance between its two major goals of 'stabilizing employment' and 'controlling inflation.'

As the uncertainty of economic data increases, both investors and policymakers will closely follow the economic indicators in the coming weeks. This data will not only influence the Fed's policy decisions but will also have a profound impact on global financial markets. In this volatile period, market participants need to remain vigilant and adjust their strategies to respond to various potential situations.