Fed Data Shake-Up Raises Policy Risks

S&P500 jolts as J.P. Morgan warns abrupt BLS dismissal risks data integrity and policy clarity.

J.P. Morgan flagged that firing Bureau of Labor Statistics Commissioner Erika McEntarfer early could politicize the data underpinning Fed decisions and the $2.1 trillion TIPS market. The bank pointed out that even swapping to an HICP-style CPI calculation would shave about 20 bps off reported inflation, and private big data lacks the federal survey's national representativeness, risking distorted signals.

Analysts say this move creates overlap with an elevated Jerome Powell tenure, heightening friction on the FOMC after two dissents this week, the first dual break since 1993. Having a flawed instrument panel can be just as dangerous as having an obediently partisan pilot, they wrote, warning that data quality is as vital as policy guidance.