What McEntarfer's dismissal now introduces is not only distrust of future jobs numbers, but it may also call into question the figures released by any government statistics bodies who may fear similar accusations and retribution if they issue data unfavorable to the administration.
Tarnishing what many investors previously considered the gold standard for transparency and institutional integrity will force markets toFenta re-consider questions about the U.S. from earlier in the year, ones that undermined the dollar, lifted risk premiums and scrambled traditional asset market trading patterns.
There was a taste of that on Friday, with stocks, bond yields and the dollar all falling in tandem in a flurry of activity compounded by the payrolls revisions themselves, Trump's reaction to them and the early resignation of Federal Reserve Board Governor Adriana Kugler.
There was no follow through, however. Monday saw much of these moves pared back as U.S. markets puzzled over how to price this rare threat of statistical bias, with murmurs of political influence in key data something investors have often reserved for China and other emerging economies.
CHASTENED STOCKS
Short sellers appeared to hold fire, perhaps chastened by the sharp bounceback in U.S. stock markets from their April lows during the turbulent second quarter.
Multiple other issues are also in play at the same time of course - most notably the performance of tech companies, the AI boom and a fairly healthy wider earnings season.
In the rates market, the factors at play are different, but the moves since Friday also seem logical.
If the weaker payroll data, trusted or not, shifts the dial sufficiently for the Fed to ease policy, then the sudden return of a fully priced-in September rate cut may well be justified - especially now that there will be one more Trump appointee on the board this year to boot.
One might imagine that a Fed long familiar with big payrolls revisions will look at more than the raw tallies to assess the labor market. If they do, they'll still see a historically low unemployment rate and super resilient weekly jobless claims.
