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Whatever the eventual effect of Trump’s tariffs, it hasn’t fully shown up in the CPI. So it’s awfully hard, even for Trump, to contend that his enemies have rigged the statistics when the numbers are bad but that the figures are legitimate when they are good.
One of the main consumers of the BLS price data is the Federal Reserve. The Fed looks closely at inflation trends in deciding whether to raise or lower interest rates or keep them the same. The fact that inflation was relatively low in July suggests that the Fed could well make a modest cut in rates at its September meeting, though rising core inflation may cut against that.
The Fed’s economists will be looking intently at any adjustments that Antoni tries to make, either in BLS methods or in revisions after the fact. The Fed system employs some 500 Ph.D. economists and a total of more than 15,000 professional employees, dwarfing the BLS. The Fed could develop its own data series on jobs and prices, reinforcing the role of the Fed as one of the few centers of policy and expertise that Trump doesn’t control. If Antoni succeeds in rigging the BLS numbers, businesses and scholars, as well as the Fed itself, would rely on the Fed’s numbers.
The problem, however, as economist Teresa Ghilarducci points out, is that a variety of laws specify the CPI as the basis for adjustments in everything from Social Security checks, Treasury Inflation-Protected Securities (TIPS), annual increases for federal and military pensions, veterans’ benefits, federal tax brackets and penalties, state minimum wages, HUD housing subsidies, and collective-bargaining agreements across the private sector.
So while the Fed can help keep the BLS honest, there is no substitute for data that is free from political manipulation.
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