This is a useful story by Bloomberg news. President Trump is attacking the credibility of U.S. economic data after last week’s soft jobs report, calling it rigged because of downward revisions to payroll data. Pay attention to the consumer price index release next week. It’s produced by the same Bureau of Labor Statistics agency that produced the jobs report.<\/p>\n\n\n\n
What happens if President Trump attacks inflation statistics and undermines confidence in them? Will investors demand a higher price when purchasing Treasury bonds as compensation for uncertainty about inflation data?<\/p>\n\n\n\n\n\n
There is real money on the line with CPI releases, which track inflation. As Bloomberg notes, the $2 trillion Treasury Inflation Protected Securities market is directly priced off the consumer price index, meaning investors are compensated for the inflation it reports. Investors in the broader $28 trillion U.S. Treasury bond market depend on CPI data to make judgments about the price and value of U.S. government debt. The Federal Reserve depends on the data to make judgments about the appropriate level of interest rates — CPI is the key input into the personal consumption expenditure (PCE) price index that the Fed targets to achieve 2% inflation.<\/p>\n\n\n\n
The inflation data seem prone to attack by the president if they don’t behave according to his liking. An inflation pickup would undermine him in several ways: 1) It would undercut his call for the Fed to cut interest rates; 2) It would undercut his central 2024 argument to the electorate that he’d stop an inflation he said Biden caused; 3) It would threaten Republican control of the House and Senate in 2026 midterms.<\/p>\n\n\n\n
I see risks of higher inflation because the dollar has weakened, tariffs could push up goods prices and squeeze corporate profit margins, the labor supply is being squeezed by immigration crackdowns, fiscal policy is very loose. By almost any measure, inflation remains above the Fed’s 2% target. Recession might push it down, but who wants that?<\/p>\n\n\n\n
Government statistics have been undermined for several years by falling response rates to federal agency surveys, a problem that plagues political polling, too. It’s a real statistical problem, but not an example of intentional, politically motivated rigging. Sacking the head of a data agency that produces the data – particularly after a report you don’t like – isn’t a solution to that problem. Nor is cutting funding to agencies confronting the problem.<\/p>\n\n\n\n
The President is playing a dangerous game that could end up hurting taxpayers, driving up the cost of federal debt and other debt indexed off of it. This is your problem. I see two risks: 1) Confidence in bond markets breaks suddenly, driving up the cost of debt, or, 2) We boil the frog, slowly driving up the cost of debt in increments that take a long-run toll.<\/p>\n","protected":false},"excerpt":{"rendered":"
This is a useful story by Bloomberg news. President Trump is attacking the credibility of U.S. economic data after last week’s soft jobs report, calling it rigged because of downward revisions to payroll data. Pay attention to the consumer price index release next week. It’s produced by the same Bureau of Labor Statistics agency that…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_ledewire_sync_enabled":true,"_ledewire_price_cents":75,"_ledewire_teaser":"","_ledewire_use_excerpt":true,"_ledewire_paywall_enabled":true,"_ledewire_content_id":"2e67634a-08d9-446c-9339-192039f348e6","_ledewire_sync_status":"synced","_ledewire_last_sync":"2025-12-02 12:13:25","_ledewire_error_message":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-15","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"ledewire_meta":{"sync_enabled":"1","price_cents":"75","teaser":"","use_excerpt":"1","paywall_enabled":"1","content_id":"2e67634a-08d9-446c-9339-192039f348e6","sync_status":"synced","last_sync":"2025-12-02 12:13:25","error_message":""},"_links":{"self":[{"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/posts\/15","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15"}],"version-history":[{"count":4,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/posts\/15\/revisions"}],"predecessor-version":[{"id":42,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=\/wp\/v2\/posts\/15\/revisions\/42"}],"wp:attachment":[{"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jon-hilsenrath.ledewire.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}