The Trump administration is on the verge of turning mainstream financial media outlets into little more than glorified bloggers – at least when it comes to the dissemination of key economic reports.
According to the ubiquitous “people familiar with the matter”, Trump is preparing an order to ban computers from the secure rooms where journalists gather to receive advance access to data, including the monthly jobs report.
Obviously, banning computers from the lockups would severely constrain reporters’ ability to prepare stories for release as soon as the data is available to the public.
As you can imagine, Bloomberg isn’t pleased with this. Past efforts to implement changes to the procedures have been challenged by the company, as well as by Reuters.
If these changes are implemented, it could create bottlenecks on notoriously clunky government websites, which will be inundated in the minutes following the releases. That, in turn, suggests the Labor Department and Commerce (for example) could be forced to upgrade their security measures and prepare their portals for more traffic, something that will surely go awry.
Seven years ago, the Obama administration attempted to restrict journalists from using their own computers in the lockup rooms. Bloomberg protested, and thanks in part to hearings on Capitol Hill featuring editors, the government ultimately relented, allowing the media to retain access to their own devices.
“Reporters are required to leave mobile phones and other electronic devices in lockers outside of the lockup room, along with personal effects such as umbrellas and purses”, Bloomberg writes on Tuesday, in an exasperated-sounding piece warning of the forthcoming decree from Trump.
In addition to the jobs report, this could affect GDP, retail sales and other key releases from Commerce, as well as anything that comes out of the Labor department.
Needless to say, this would very likely mean that HFTs scramble to figure out how they might obtain an upper-hand, with traditional media outlets suddenly relegated to blogger status. “The shift could also spur an arms race among high-speed traders to get the numbers first and profit off the data, raising questions about fairness in multitrillion-dollar financial markets”, Bloomberg complains, without even a hint of irony to account for the fact that they market a $26,000/year piece of equipment designed to give users that very same unfair advantage.
Without trafficking in hyperbole, we have long suggested that the Trump administration would seek greater control over the dissemination of key economic data. We’ve gone so far as to suggest that, push come to shove, the White House would manipulate the numbers if the economy were to take an undesirable turn at an inopportune time politically.
That might sound far-fetched (and it probably is), but we would implore readers to consider whether “tweaking” a data point here or there is really that much more egregious than, say, plotting to oust a Fed chair (as Trump did in early 2019, when he consulted White House counsel on the legality of demoting Jerome Powell for the high “crime” of not cutting rates).
Additionally, you’re encouraged to remember that there’s quite a bit of “goal seeking” in the data anyway, and Trump has long argued that the Obama administration disseminated “fake” jobs numbers which suddenly became “real” once he (Trump) took office.
There’s not necessarily a connection between any of that and news that the administration is seeking to curtail early access to key economic reports, but this is yet another situation when the Trump administration’s credibility deficit makes it difficult to trust anything that they do, especially when a given decision is taken in the name of “security”.
If any journalists are looking for pointers on how to prepare stories ahead of time while being blind to the actual numbers, we’ll be happy to help — “for $1 billion in the bank”, as Trump puts it.