Fed's Warsh plans to harness better economic data within a year

• Warsh aims to reduce reliance on government data with 'mismeasurement problems' and outdated surveys, seeking contemporaneous real-time economic information using new technologies
• The U.S. Bureau of Labor Statistics is getting new leadership to address reliability issues, after previous revisions showed job growth was far weaker than initially reported
• One of Warsh's five new task forces will focus specifically on discovering alternative data-gathering sources and methods to help the Fed make better policy decisions

Summary

Key Development:

Federal Reserve Chairman Kevin Warsh announced plans to implement real-time economic data systems within 9-12 months to improve monetary policy decisions. Speaking at a forum in Sintra, Portugal on July 1, 2026, Warsh criticized the Fed's current reliance on government data, which he blames for contributing to inflation running above target for over five years.

Main Points:

• Warsh is establishing five task forces, including one focused on discovering new data-gathering sources and methods, with members to be named next week
• He argues outdated government data with "mismeasurement problems" and irrelevant surveys have led to poor Fed decision-making
• The Fed currently uses a mix of government, private-sector, and in-house data, including the Beige Book summary from business canvassing

Data Quality Concerns:

• The U.S. Bureau of Labor Statistics faces reliability issues, with shrinking survey response rates causing significant later revisions
• President Trump previously fired the BLS chief over "fake data" following major downward job growth revisions
• New BLS chief Brett Matsumoto acknowledges data collection can be improved
• The Bureau of Economic Analysis plans changes to inflation data production, expected to result in downward revisions in September

Market Context:

The monthly jobs report is due Thursday, a key data point that has faced accuracy challenges. Warsh's push for alternative data sources reflects broader concerns about the quality of official economic statistics used for critical monetary policy decisions affecting interest rates, employment, and inflation control.