Last Friday, U.S. President Donald Trump received a series of unfavorable economic updates and responded quickly.
Trump dismissed the head of the U.S. Bureau of Labor Statistics just hours after data revealed a sharp slowdown in hiring across the country. On the same day, he was presented with an unexpected opportunity to strengthen his influence over the central bank when Fed Governor Adriana Kugler announced her upcoming resignation — just as investors were still processing the employment data and the Bureau of Labor Statistics report. The president will now appoint her successor, likely someone more supportive of his push for lower interest rates.
For a president who frequently praises the strength of the U.S. economy and claims that higher tariffs and tax cuts will further bolster it, Friday's employment data dealt a significant blow. The report showed the weakest job growth since the pandemic. This contrasts sharply with the optimistic narrative promoted by the administration and raises questions about the effectiveness of its economic policies. Politically, this could have serious repercussions. The opposition will likely use the data to challenge the president's economic strategy, arguing that it is failing to deliver the promised results.
Economists and analysts are closely examining the data to determine whether it is a temporary anomaly or the start of a more serious trend. If the labor market slowdown continues, the Federal Reserve may be forced to reconsider its monetary policy and possibly accelerate interest rate cuts to support economic growth. However, such a move risks fueling inflation, which would create additional challenges for the administration.
Trump's response — firing Erika McEntarfer, head of the Bureau of Labor Statistics, whom he accused of political bias — has drawn criticism even from economists affiliated with his own party and raised concerns among investors. Many analysts view this decision as a sign that Trump not only misunderstands the principles behind the independence of statistical agencies, but is also willing to sacrifice objectivity for political gain.
The dismissal of McEntarfer, a seasoned professional, undermines trust in official statistics and creates the impression that the administration is attempting to manipulate data to improve its image. The consequences of such actions could be significant. Investors who rely on objective economic indicators to make decisions may lose confidence in the U.S. economy, potentially triggering capital outflows and slower economic growth. Furthermore, undermining trust in statistics could complicate the development of effective economic policies and lead to misguided decisions. In the long run, Trump's actions toward the Bureau of Labor Statistics may damage the U.S. economy and erode trust in institutions responsible for transparency and data integrity.
There is already widespread concern about Trump's ongoing pressure on the Federal Reserve and its Chair Jerome Powell to lower interest rates, as many agree that central banks are more effective at managing inflation when political interference is absent. Trump's moves against U.S. statistical agencies now threaten the integrity of key global data — figures that can influence trillions of dollars in global markets.
"Trump's targeting of the Bureau of Labor Statistics (BLS) is causing broad concern in the market, as political motivations could impact future economic decisions," PNC Asset Management Group stated. "What worries investors most now is: what's next? Will Trump once again threaten to fire Fed Chair Powell?"
As for the market's reaction to the news and Trump's actions — the dollar's response was clear.
EUR/USD Technical Outlook: Buyers now need to focus on breaking above the 1.1600 level. Only then will it be possible to aim for a test of 1.1640. From there, a move toward 1.1665 is possible, but achieving this without support from large players will be difficult. The furthest target is the high at 1.1690. If the instrument declines, serious buying activity is expected only around 1.1555. If that area fails to attract interest, it may be wise to wait for a retest of the 1.1518 low or consider long positions from 1.1479.
GBP/USD Technical Outlook: Pound buyers need to break through the nearest resistance at 1.3305. Only then will a move toward 1.3340 become feasible, although breaking above that level will be quite challenging. The ultimate target is 1.3380. If the pair declines, bears will attempt to regain control at 1.3255. A break of that range would deliver a significant blow to bullish positions and push GBP/USD toward the 1.3217 low, with a potential move to 1.3180.
