Political intervention raises market concerns, questioning the independence of the Fed and the credibility of economic data.

Recent high-level personnel changes have raised market concerns, as the Fed's independence and the credibility of economic data face unprecedented challenges.

Shortly after the July non-farm payroll report was released, Labor Statistics Bureau Director Erika McEntarfer was dismissed. Some claimed that the employment data was "manipulated" and accused McEntarfer of altering the numbers to make certain politicians "look bad."

Almost at the same time, Fed Governor Cook announced that he would resign on August 8, several months earlier than the end of his term. Some people on social media stated that Powell should also resign.

Analysts point out that after the new appointees are in place, the independence of the Fed and the authenticity of U.S. economic data may be called into question.

Investors and analysts are generally concerned that if the objectivity of economic data and the independence of the Fed are subject to political interference, the United States' "exceptionalism" status may be impacted, which in turn could affect global capital's confidence in the U.S. market.

Unprecedented Data Institutional Intervention

Without providing evidence, someone stated that "important data must be fair and accurate, and cannot be manipulated for political purposes," and also pointed out that "more capable and qualified individuals" will replace McEntarfer.

Analysts pointed out that the decision to dismiss the head of the Bureau of Labor Statistics has shocked the economic community. The agency is responsible for releasing employment and inflation data, which are the foundation for global asset pricing.

The U.S. Department of Labor confirmed that McEntarfer has been fired, and Deputy Director William Wiatrowski will serve as acting director. David Wilcox, former head of the Federal Economic Statistics Advisory Committee, stated: "The firing of the Bureau of Labor Statistics director is a serious blow to the integrity of the U.S. statistical system."

The "Friends of the Bureau of Labor Statistics" organization warns that "the consequences are dire when national leaders politicize economic data and undermine public trust in their data infrastructure."

Steve Sosnick, chief market analyst at a trading platform, stated: "If the data collectors are influenced by political will, it may raise questions about the future accuracy and impartiality of the data."

The non-farm employment report released on Friday showed that job growth has sharply slowed down over the past three months, with significant downward revisions in the employment data for May and June.

Analysts point out that such a large-scale data correction is indeed rare, but it is equally unprecedented to dismiss officials without first investigating the reasons.

The Independence of the Fed Faces Challenges

According to reports, the sudden resignation of Governor Kuggler may pave the way for the early appointment of Powell's successor. Powell's term as Fed Chair is set to expire in May 2026.

Krishna Guha of investment bank Evercore pointed out: "The direct effect of Kugar's resignation is likely to accelerate the process of selecting the next Fed chairman. Such a person would effectively serve as the shadow Fed chairman before taking over from Powell."

Jamie Cox, managing partner at Harris Financial Group, stated: "It is worth noting that Kugler was absent from this week's meeting and did not vote, and now we know the reason. Kugler's resignation has allowed some individuals to further shape the FOMC according to their own ideas."

Recently, someone went to the Fed's Washington headquarters to criticize Powell for the monetary policy and the cost overruns of the $2.5 billion renovation project, which is a rare public disagreement.

Concerns about the Credibility of Market Data

Investment institutions have expressed widespread concern over this series of personnel changes.

CFRA Research Chief Investment Strategist Sam Stovall stated that if someone appoints a very dovish head of the Bureau of Labor Statistics, "Wall Street will no longer pay attention to this data if they believe the data is being manipulated to support the government's position."

AFL-CIO Communications Director Jody Calemine stated: "Today may be the last reliable jobs report we see. This is not good for anyone looking to understand the state of the economy, not just for workers, but for the entire business community as well."

Christopher Hodge, Chief U.S. Economist at Natixis, pointed out: "If the accuracy of the data is compromised, it will put the markets and the Fed in a very precarious position. I expect the Fed to increasingly rely on anecdotal information collected from the Beige Book."

Monex USA Senior Trading Director Juan Perez stated: "Regardless of the economic conditions in the United States, one factor that supports the strength of the dollar in the eyes of the world is the authority and independence of the Fed. When anything poses a threat to this, the dollar tends to spiral downwards."