US: Attacks on US institutions continue – Commerzbank

On Monday night, Donald Trump announced on social media that he would appoint the chief economist of the Heritage Foundation, a right-wing think tank, as the new head of the statistics agency, having dismissed the former head following the publication of weak labour market data just around a week and a half ago. This candidate has previously launched vehement attacks on the statistics agency. Trump also directly stated that the data would now be 'honest and accurate' because the US economy was 'booming', Commerzbank's FX analyst Michael Pfister notes.

Trump considers a lawsuit against Powell

"Yesterday evening, statements made by the designated head of the statistics agency in an interview on Monday, prior to the announcement of his nomination, were made public. In it, he suggested suspending the monthly labor market report until the problems had been 'corrected'. In his defence, he does want to retain the 'more accurate' quarterly report for the time being."

"Following the release of US inflation figures, further criticism was directed at Fed Chairman Jerome Powell. Alongside the now regular calls for Powell to lower interest rates, Trump emphasized his intention to consider a lawsuit against Powell. This would probably be based on the allegedly spiraling construction costs for the Fed's expansion, which Trump claims should have been a mere '$50 million fix up' – deliberately ignoring the fact that $2.5 billion had been budgeted from the outset."

"Increasingly this carries echoes of autocratic countries, where the heads of statistics agencies or central banks are being replaced. In these countries, critical data series are often discontinued and then reinstated a few months later after the 'problems' have supposedly been corrected, with significantly better values. I'm not saying that this will necessarily happen here. But the developments of the last few days and weeks do not exactly fill me with optimism about the future – or the US dollar."