ThePrint OpinionEconomix: Govt shutdown, rate cut—US policy paralysis has created an opportunity for India
Nov 5, 2025
The recent rate cut by the US Federal Reserve amidst a government shutdown raises interesting global implications. Without fresh data, the Fed made a cautious move that impacts investor behavior and costs of capital. This development creates opportunities for India, allowing it to attract investments and fund major infrastructure projects. However, there's caution as a weakened US economy could hurt Indian exports. India is presented with a unique chance to deepen trade ties and promote financial independence during these turbulent times.
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Fed Cut Was A Cautious Navigation
- The Fed cut its main rate by 0.25 percentage points to a 3.75–4% range amid cooling US growth and sticky inflation.
- The move aimed to prevent a sharper slowdown despite incomplete data because the government shutdown delayed fresh reports.
Shutdown Silenced Key Economic Data
- A US government shutdown halts data releases from agencies like the BLS and Commerce Department.
- Jerome Powell admitted the Fed was operating with incomplete visibility and had to rely on older August data.
The 35-Day Shutdown Example
- The longest US shutdown lasted 35 days from Dec 22, 2018 to Jan 25, 2019, over a border wall dispute.
- Airports, parks and research labs closed and key economic reports were delayed during that episode.