June 08, 2018

Senators Open Inquiry on President Trump's Reckless Comments on Jobs Report

Call for Investigation to Identify if Anyone Obtained or Used Nonpublic Market-Moving Information for Private Gain

Text of letter to SEC and CFTC (PDF)

Text of letter to BLS (PDF)

Text of letter to Council of Economic Advisers (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Michael Bennet (D-Colo.) today sent letters to the Bureau of Labor Statistics (BLS), Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), and the White House Council of Economic Advisers (CEA) expressing concern over President Donald Trump's reckless comments on market-moving economic data prior to their public release. The senators noted that this was a violation of federal guidelines and asked SEC and CFTC to investigate whether any person or corporate entity was able to obtain and use market-moving information before official release and questioned BLS about the controls it has in place to keep the data confidential. They also pressed the CEA on what additional steps the Administration will take to ensure that no one is taking advantage of the prerelease data for private gain.

On June 1, 2018, President Trump tweeted "Looking forward to seeing the employment numbers at 8:30 this morning," signaling that the employment numbers were positive for the administration and surpassed market expectations. Financial markets reacted immediately following his tweet with yields on the 10-year Treasury note, the dollar index, and stock futures all increasing. The disclosure of this information prior to their official release politicizes economic data and increases the possibility that this inside information could be used for unlawful advantage in the market.

"President Trump recklessly violated federal rules and years of precedent by telegraphing financial data that has the power to move our markets," said Senator Warren. "The Trump Administration is swarming with people who have secret financial holdings and conflicts of interest a mile long. The BLS and the CEA should examine what went wrong here - and the SEC and CFTC should investigate to make sure that no one obtained and used non-public information to feather their own nest."

"These questions will determine whether the President knowingly used our country's most sensitive economic data to enrich himself and his Wall Street cronies," said Senator Wyden. "Trump was reckless and irresponsible enough to disclose this information ahead of time, stacking the deck in favor of hedge funds and high-speed traders. We must determine the extent of the president's leaking, its impact on the financial markets and whether Trump's friends benefitted from it."

"Economic data is made public at a specific time on a specific day to prevent market manipulation," said Senator Bennet. "With hundreds of billions of dollars at stake, we need to determine if the President's inappropriate disclosure of highly sensitive information is an isolated incident or representative of a broader trend. If the President cannot muster the discipline to refrain from blurting out information like this, he should no longer have access to it in advance."

This is not the first time that this long-standing federal rule has been violated during President Trump's presidency. The numerous conflicts of interest and financial holdings of members of the Administration - and the continued secrecy about these holdings - heightened the senators' concerns that the President or White House staff may have disclosed pre-released data beyond the very small group authorized to see them before official publication. Reports already indicate that strategists and market observers have started to use the President's twitter feed as a way of preparing for economic data updates. This demonstrates a lack of precision in protecting these sensitive data and raises the additional concern that the policy directive may be routinely violated in other ways.

The senators asked the SEC and CFTC to investigate whether or not any individual or entity was able to get information from the President or White House official on any earlier statistical report given prior to release, and if so whether they made any trades or took any other action based on that information. They asked BLS and the CEA to conduct an investigation into what controls are in place to prevent members of the Executive branch from releasing statistical data prior to their official publication and whether or not they were used for this most recent report as well as for reports in the past.