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The United States monetary authority lowered interest rates on Wednesday, marking the second rate cut this year during financial volatility stemming from the federal government shutdown and trade duties.

Move Arrives at Extraordinary Time for Central Bank

The move to cut the key rate by a quarter point to a range of 4% to 3.75% comes at an extraordinary juncture for the Fed. The institution has been under immense pressure to lower borrowing costs even with ongoing price increases.

Fed Statement Highlights Job Market Changes

In a statement, the Fed stated that the unemployment rate had gone up but remains low. “Job gains have decelerated,” the statement reads. “Inflation has moved up and remains moderately high.”

Federal Closure Complicates Central Bank’s Task

The ongoing federal government shutdown, now among the lengthiest in US history, has also hindered the Fed’s job. Gathering of important financial statistics has been indefinitely halted as staff at the Bureau of Labor Statistics are furloughed during the shutdown.

Data Gap Impacts Monetary Moves

The Fed typically studies labor statistics to determine labor market conditions, such as the count of new jobs created to the market and the current jobless percentage. The last jobs report was released in early September, before the closure, and provided a somewhat gloomy snapshot of the jobs market in the previous month.

The figure of jobs created to the economy in August was down by over 100k since the spring, and unemployment crept up to 4.3% – the highest since three years ago.

Private Data Show Ongoing Slowdown

Though the bureau was scheduled to publish September’s job market report in early October, it suspended its release when the closure began. Private payroll firm a leading payroll processor reported earlier this month that the private sector cut thirty-two thousand positions in last month, a sign that the job market is continuing to slow.

“Both the supply and demand for labor has fallen significantly,” Fed chair Jerome Powell stated earlier this month, which he had earlier attributed comes from trade and immigration measures.

Inflation Report Reveals Gradual Increase

Though the bureau’s employment data has been paused, the bureau still issued its inflation report for last month that showed that prices are rising, albeit slowly. Prices increased three percent over the last year, the highest since January. In spring, the yearly price increase was 2.3%, the lowest it has been since three years ago. The Fed’s target inflation rate is two percent.