Waller: Replace Government Statistics with Real-Time Data Within a Year
N.R. Finch
Fed Chair Kevin Warsh told the ECB's Sintra forum he plans to use new technology to obtain real-time economic data within 9–12 months, reducing reliance on lagging government reports — a shift that would fundamentally rewire the information base behind Fed decisions.
What exactly is Warsh proposing?
Warsh's core goal: use new technology to track the real economy in a "synchronous, real-time" way, so Fed officials no longer depend solely on government statistical reports.
He set himself a 9-to-12-month deadline. This means → this is not a long-horizon vision but a reform roadmap with a delivery date.
In plain terms = the Fed currently makes decisions mostly on data from the Bureau of Labor Statistics and the Bureau of Economic Analysis. Warsh wants new data sources that can at least partly replace them within a year.
Why does he think current data falls short?
Warsh has long criticized official data as lagging and distorted, calling it a primary cause of the Fed's inflation-response failures over the past five years.
His logic chain: poor data quality → policy misjudgment → inflation staying above the 2% target.
This reflects something deeper — a sitting Fed chair is publicly questioning the information infrastructure his own institution runs on, a stance rare among his predecessors.
What are the five task forces?
Warsh said he will begin releasing membership lists for five new task forces next week; one is dedicated to finding new data sources and collection methods.
The task forces will not just patch existing official data — they may also explore entirely new paths for generating timely economic information.
This means → the reform runs on two tracks: improve old data, and build new data pipelines from scratch.
What is going wrong inside the statistical agencies?
The Bureau of Labor Statistics (BLS) is in leadership transition: the previous commissioner was fired by Trump over alleged "data fraud," after the agency published sharply revised-down employment growth figures.
The new nominee, Brett Matsumoto, denied deliberate manipulation but acknowledged room to improve collection methods. Economists point to falling initial response rates in monthly jobs surveys as a structural driver of large subsequent revisions.
The Bureau of Economic Analysis (BEA) also announced changes to how it compiles certain inflation data, expected to produce downward revisions in September. In plain terms = the agencies that produce the data are themselves changing their methods — indirectly validating Warsh's "unreliable data" critique.
How do other Fed officials see it?
Warsh's colleagues typically handle data lags and revision risk by "watching longer-term trends" rather than chasing real-time numbers.
They rely on the Fed's periodic Beige Book — a survey report compiled by interviewing businesses and organizations across the country — to track economic shifts.
When asked about what recent data means for monetary policy, Warsh himself cited the "watch the trend" approach and gave no signal on specific policy direction. This means → data reform is Warsh's long-term agenda, but in the short run he is still making decisions within the existing framework.
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