By Howard Schneider, Balazs Koranyi and Ann Saphir <\/p>\n
SINTRA, Portugal, July 1 (Reuters) – Federal Reserve Chairman Kevin Warsh set an ambitious timeline on Wednesday for the U.S. central bank to “discover” and start relying on real-time economic data that’s superior to what \u200che described as problematic government reports. <\/p>\n
“My aspiration is that nine to 12 months from now we’re going to be using new technologies \u200cto understand what’s happening in the real economy in a contemporaneous, real-time way that positions us as central bankers to make better decisions, that we’re no longer going to \u200bhave to rely solely on data that we get from government agencies with mismeasurement problems that have surveys that are no longer relevant,” Warsh told a monetary policy forum in Portugal. “My favorite data is upon us, and if we do our jobs, we’ll be here a year from now, and we’ll say we’ve discovered data that helps us make better decisions.” <\/p>\n
The Fed currently uses a wide array of government, private-sector and in-house data, both public and non-public, \u200cto track the economy and figure out where \u2060it is going as it tries to set interest rates to support employment and bring inflation under control. <\/p>\n
Warsh has criticized the Fed for leaning too heavily on official data that lags or misrepresents current conditions and says that \u2060poor data feeding into poor Fed decision-making is mainly to blame for inflation running above the target for more than five years. <\/p>\n
Warsh’s colleagues at the Fed, for their part, typically say that they try to protect against being wrongfooted by data that is later revised or hasn’t caught up with current conditions by \u200blooking \u200bat trends over time — an approach that Warsh himself embraced on Wednesday as \u200bhe sidestepped questions about what recent economic reports mean for \u200cmonetary policy. <\/p>\n
They also say that their efforts to canvas business leaders and organizations across the country, a summary of which is published regularly in the Fed’s so-called Beige Book, helps them keep track of real-time changes in the economy that official data may take longer to reflect. <\/p>\n
On Wednesday Warsh said he would next week begin naming members of his five new task forces, one of which focuses on finding new data-gathering sources and methods. <\/p>\n
Warsh’s apparent yen to reduce reliance on government data comes as one lead U.S. data agency, the U.S. Bureau of Labor Statistics, is set \u200cto get a new chief who has promised to fix technical issues that reduce \u200bthe reliability of its critical economic reports. <\/p>\n
One of those, the monthly jobs report, is \u200bdue out on Thursday. <\/p>\n
U.S. President Donald Trump fired the previous BLS \u200bchief for producing what he called fake data after the agency issued big revisions that showed job growth was \u200cfar weaker than what was initially reported. <\/p>\n
Trump’s new pick \u200bfor the job, Brett Matsumoto, has said \u200bhe doesn’t believe the data was rigged but that its collection can be improved. Economists say the problem lies in part in the job surveys’ shrinking initial response rates, leading to later revisions as more responses are recorded. <\/p>\n
The Bureau of Economic Analysis recently announced \u200ba change in how it produces some inflation \u200cdata that is widely expected to result in downward revisions to its numbers come September. <\/p>\n
Warsh says his task force may have \u200bideas about how to improve official data but also about how to generate more up-to-date information about the economy. <\/p>\n
(Reporting by \u200bFrancesco Canepa, Koranyi Balazs, Howard Schneider, Ann Saphir; Editing by Chizu Nomiyama) <\/p>\n","protected":false},"excerpt":{"rendered":"By Howard Schneider, Balazs Koranyi and Ann Saphir SINTRA, Portugal, July 1 (Reuters) – Federal Reserve Chairman Kevin…\n","protected":false},"author":2,"featured_media":774397,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,48029,35755,29338],"class_list":["post-774396","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-inflation-data","tag-kevin-warsh","tag-the-fed"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/774396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=774396"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/774396\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/774397"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=774396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=774396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=774396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}