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The United States central bank lowered borrowing costs on Wednesday, representing the second reduction in the current year amid financial volatility stemming from the federal government shutdown and trade duties.

Move Arrives at Extraordinary Time for Federal Reserve

The decision to reduce the benchmark interest rate by a 0.25% to a range of 3.75% to 4% arrives at an unprecedented juncture for the central bank. The authority has been under immense pressure to cut rates even with persistent inflation.

Fed Statement Highlights Job Market Shifts

In a statement, the Fed said that the jobless rate had increased but remains low. “Employment growth have slowed,” the release notes. “Inflation has moved up and stays moderately high.”

Government Shutdown Hinders Central Bank’s Task

The continuing federal government shutdown, now one of the longest in American history, has also complicated the Fed’s job. Gathering of important economic data has been indefinitely halted as staff at the Bureau of Labor Statistics are on leave during the closure.

Information Shortage Impacts Monetary Moves

The Fed typically studies BLS data to assess employment trends, such as the count of new jobs created to the economy and the current jobless percentage. The last jobs report was published in the beginning of last month, prior to the shutdown, and provided a relatively bleak snapshot of the employment scene in August.

The number of jobs added to the economy in the summer month was down by over 100k since the earlier season, and joblessness rose to 4.3% – the highest since three years ago.

Private Data Show Continued Slowdown

Though the bureau was scheduled to publish September’s job market report in early October, it suspended its publication when the closure began. Employment data company a leading payroll processor reported recently that the business segment cut thirty-two thousand jobs in September, a indication that the employment landscape is continuing to slow.

“Supply as well as demand for workers has fallen quite sharply,” central bank head Jerome Powell said earlier this month, a trend he had previously said comes from trade and immigration measures.

Price Data Shows Gradual Increase

Though the bureau’s jobs report has been paused, the agency still issued its inflation report for last month that indicated that costs are rising, albeit gradually. Costs increased three percent over the last year, the peak since January. In April, the yearly price increase was 2.3%, the lowest it has been since three years ago. The central bank’s goal inflation rate is 2%.