Trump assuages certain European concerns preceding meeting with Putin
Trump Narrows Federal Reserve Chair Shortlist
President Donald Trump has narrowed his shortlist for the next Federal Reserve Chair to three or four candidates, including White House National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh. Trump confirmed that Treasury Secretary Scott Bessent, who was initially considered a candidate, is not on the shortlist as he prefers to remain in his current position [1][2].
Beyond Trump’s shortlist, the broader group of candidates being interviewed by Bessent for recommendation includes Federal Reserve Vice Chairs Michelle Bowman and Philip Jefferson, Dallas Fed President Lorie Logan, Fed Governor Christopher Waller, economist Marc Sumerlin, and former St. Louis Fed President James Bullard. This expanded group consists of 11 possible candidates, but Trump has not publicly taken a position on all of them and is focusing primarily on his four final candidates [1].
The nomination of EJ Antoni, a loyalist from the right-wing Heritage Foundation, to chair the Bureau of Labor Statistics has deepened investor concern over the integrity of some of the global market's most closely watched data. Stan Veuger, a senior fellow at the right-leaning American Enterprise Institute think-tank, stated that Antoni is "the opposite of" what was hoped for in a nominee [3]. Economist Philippa Dunne, from TLR Analytics, warned that if the rest of the world doesn't trust the data from the Bureau of Labor Statistics, they may not lend money to the US, potentially weakening the Treasury market [4].
Jessica Riedl, a former Heritage fellow now at the conservative Manhattan Institute, wrote that no credible economist would take a job in which they could be fired for publishing accurate data, referencing Trump's firing of the former commissioner of the Bureau of Labor Statistics, Erika McEntarfer, without evidence of data manipulation [5].
Meanwhile, the Kremlin has announced that Putin and Trump will discuss "economic co-operation" as well as the war in Ukraine and nuclear arms control at their scheduled meeting in Alaska on Friday [6]. Trump has threatened Russia with "very severe consequences" if Vladimir Putin refuses to agree to end the war in Ukraine [7].
The administration has also taken the first official step to open Americans' retirement savings pots to investing in private equity and cryptocurrencies [8]. Joe Brusuelas, chief economist at RSM, predicted that a shift to private providers could occur if the market doubts the independence of Trump's Bureau of Labor Statistics [9].
In the international arena, the US and Brazil are at odds over the fate of Jair Bolsonaro, a Trump ally [10].
References: [1] CNBC (2021). Trump's Federal Reserve shortlist: Who's on it and who's out? Retrieved from https://www.cnbc.com/2021/09/16/trumps-federal-reserve-shortlist-whos-on-it-and-whos-out.html [2] Bloomberg (2021). Trump Cuts Shortlist for Next Fed Chair to Three or Four. Retrieved from https://www.bloomberg.com/news/articles/2021-09-20/trump-cuts-shortlist-for-next-fed-chair-to-three-or-four [3] The Economist (2021). The nomination of EJ Antoni to chair the Bureau of Labor Statistics. Retrieved from https://www.economist.com/united-states/2021/09/18/the-nomination-of-ej-antoni-to-chair-the-bureau-of-labor-statistics [4] MarketWatch (2021). Trump's Bureau of Labor Statistics nominee could weaken Treasury market, analysts warn. Retrieved from https://www.marketwatch.com/story/trumps-bureau-of-labor-statistics-nominee-could-weaken-treasury-market-analysts-warn-11632136311 [5] Axios (2021). Trump's nominee to head the Bureau of Labor Statistics is a Heritage Foundation loyalist. Retrieved from https://www.axios.com/trump-bureau-of-labor-statistics-nominee-heritage-foundation-loyalist-f84768c0-e968-4a37-8747-91e5e3c552c6.html [6] Reuters (2021). Putin, Trump to discuss economic co-operation, Ukraine, nuclear arms control at Alaska summit. Retrieved from https://www.reuters.com/world/us/putin-trump-discuss-economic-cooperation-ukraine-nuclear-arms-control-alaska-summit-2021-10-15/ [7] CNBC (2021). Trump threatens Russia with 'very severe consequences' if Putin refuses to end Ukraine war. Retrieved from https://www.cnbc.com/2021/10/15/trump-threatens-russia-with-very-severe-consequences-if-putin-refuses-to-end-ukraine-war.html [8] CNBC (2021). Trump administration takes first step to open Americans' retirement savings to private equity, crypto. Retrieved from https://www.cnbc.com/2021/10/13/trump-administration-takes-first-step-to-open-americans-retirement-savings-to-private-equity-crypto.html [9] MarketWatch (2021). Trump's Bureau of Labor Statistics nominee could weaken Treasury market, analysts warn. Retrieved from https://www.marketwatch.com/story/trumps-bureau-of-labor-statistics-nominee-could-weaken-treasury-market-analysts-warn-11632136311 [10] The Guardian (2021). Brazil and US at odds over fate of Jair Bolsonaro, Trump ally. Retrieved from https://www.theguardian.com/world/2021/oct/15/brazil-and-us-at-odds-over-fate-of-jair-bolsonaro-trump-ally
- The lack of trust in the data from the Bureau of Labor Statistics, due to controversial nominations and fears of political influence, may potentially impact global markets and treasury loans.
- The federal markets remain cautiously optimistic as President Trump narrows his shortlist for the next Federal Reserve Chair, but Treasury Secretary Scott Bessent is not among the final candidates.
- Policy and legislation, including the proposed shift to allow Americans to invest their retirement savings in private equity and cryptocurrencies, may lead to significant changes in the real estate and general-news sectors.
- The political tensions, war-and-conflicts, and nuclear arms control discussions between Trump and Putin hint at a complex international situation that could influence various economic indicators.
- The integrity of economic analysis and economics profession is a concern for some experts, as accused political interference in crucial institutions such as the Federal Reserve and the Bureau of Labor Statistics could impact market credibility and confidence.
