Fed’s Data Revisions Expose Weakness as Powell Holds Rates Amid Political Pressure

Jerome Powell's insistence on maintaining interest rates despite political pressure now appears justified—but not without controversy. Recent labor data revisions erased over 300,000 jobs from late 2024 reports, revealing systemic flaws in the Fed's economic indicators. What initially seemed like a resilient job market collapsed under scrutiny.

Trump had warned of impending cracks, dubbing Powell "Jerome 'Too Late' Powell" on Truth Social. Labor Secretary Lori Chavez-DeRemer escalated demands for immediate cuts after August's dismal jobs report showed just 22,000 additions against 75,000 expectations. Unemployment ticked up to 4.3%, marking three consecutive months of deterioration.

The Fed now faces a credibility crisis. Its September meeting will test whether Powell's patience was prudence or paralysis as markets price in inevitable cuts. Cryptocurrencies may see volatility as traditional finance grapples with these macroeconomic crosscurrents.