Markets have been explicitly data-reliant ever since @federalreserve removed their forward guidance.
But – Can We Trust the Data?
@jpmorgan, @GoldmanSachs, and @UBS have all recently questioned the validity of the data and official numbers we’ve been seeing.
Let’s explore ☟☟
Markets have dramatically repriced in the month of February.
Terminal rates have moved to cycle highs.
50bp #ratehikes are back on the table.
And hopes of a #FedPivot in 2023 are a distant memory.
The data point that triggered all this was the recent #nonfarmpayrolls print from 3 Feb.
Coming in at +517k, it completely smashed expectations.
But as I mentioned before, many large investment banks economists are asking if we can even trust this data.
They have all been recently citing alternative measures.
(and arguably more accurate measures)
That suggests initial jobless claims and #JOLTs data are either intentionally or accidentally inaccurate.
We already knew that #NFP data are often subject to massive revisions well after the fact (see first chart attached).
And even the BLS has expressed concerns.
But now it seems the data that #theFed is leaning on to set monetary policy is not only lagged but potentially completely wrong.
If so, chances are a policy mistake may have already happened.
And the slowdown that eventually hits us may have been made worse by not being forthright (or just more accurate).
Sure, the #recession might have been delayed…
But when it does come, I fear it’s gonna hurt even more!
➠ Some of you are likely thinking, “no, duh that they give us fugazi/crappy data.”
So then what are to do about it?
Just deal with what we’ve got and play along with the data that the puppet masters want to pawn on us?
Let me know what you think in the replies!
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