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Fed's Warsh plans to harness better economic data within a year
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Fed's Warsh plans to harness better economic data within a year
Jul 1, 2026 10:29 AM

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 he described as problematic government reports.

"My aspiration is that nine to 12 months from now we're going to be using new technologies to 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 have 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."

The Fed currently uses a wide array of government, private-sector and in-house data, both public and non-public, to track the economy and figure out where it is going as it tries to set interest rates to support employment and bring inflation under control.

Warsh has criticized the Fed for leaning too heavily on official data that lags or misrepresents current conditions and says that poor data feeding into poor Fed decision-making is mainly to blame for inflation running above the target for more than five years.

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 looking at trends over time -- an approach that Warsh himself embraced on Wednesday as he sidestepped questions about what recent economic reports mean for monetary policy.

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.

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.

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 to get a new chief who has promised to fix technical issues that reduce the reliability of its critical economic reports.

One of those, the monthly jobs report, is due out on Thursday.

U.S. President Donald Trump fired the previous BLS chief for producing what he called fake data after the agency issued big revisions that showed job growth was far weaker than what was initially reported. 

Trump's new pick for the job, Brett Matsumoto, has said he 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. 

The Bureau of Economic Analysis recently announced a change in how it produces some inflation data that is widely expected to result in downward revisions to its numbers come September. 

Warsh says his task force may have ideas about how to improve official data but also about how to generate more up-to-date information about the economy. 

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