Donald Trump’s decision to fire Erika McEntarfer, head of the Bureau of Labor Statistics (BLS), for delivering jobs data he didn’t like should spook investors.
Panmure Liberum’s Joachim Klement likens it to Turkish president Recep Tayyip Erdogan’s disastrous firing of his chief statistician in 2022. Trump’s move is “extremely dangerous for investors everywhere”, says Klement, with truthful economic data being “the foundation on which investments are built.
“That’s echoed by the Friends of BLS campaign.
Backed by economists from left and right, it’s pushing for McEntarfer’s reinstatement and the protection of statistical independence.
Wall Street banks, too, are spooked, briefing clients that the sacking – defended by Trump as a response to “rigged” jobs data – undermines the credibility of labour and inflation figures that underpin trillions in assets and guide interest rate decisions.
[ Trump’s answer to negative economic news: Sack the statisticianOpens in new window ]
Nearly as alarming as McEntarfer’s firing is its defence by White House adviser Kevin Hassett. Once a mainstream Republican economist, Hassett now toes the Trump line.
The US government is infested with “people who have been resisting Trump everywhere they can” and needs “highly qualified people … that have a fresh start and a fresh set of eyes on the problem”.
Traders on prediction markets Kalshi and Polymarket now see Hassett as the front-runner to replace Jerome Powell as Fed chair, with his odds spiking in recent days.
Markets can absorb bad news, but not bad data dressed up as good. If Hassett takes the helm at the Fed, investors will have to worry not just about who reports the numbers, but who acts on them.
