Inflation data in the U.S. faces scrutiny after Trump’s removal of the head of the Bureau of Labor Statistics. The upcoming Consumer Price Index release will test investor trust in economic data integrity. Concerns about data politicization could lead to higher TIPS yields, affecting the federal government’s cost of funding.

Trump’s removal of the BLS head followed surprise weakening in the U.S. labor market data, raising concerns about the Federal Reserve’s interest rate decisions. The BLS is also responsible for the CPI report, crucial for assessing inflation dynamics that influence monetary policy.

Investors may turn to alternative data sources to gauge U.S. economic health amidst uncertainty over BLS data accuracy. While TIPS remain linked to the CPI, their market could be affected if the next BLS head is perceived as biased. Lower demand for TIPS could impact inflation expectations and policy decisions by the Federal Reserve.

Read more at Yahoo Finance: Analysis-Inflation data to draw scrutiny after BLS firing, $2.1-trillion TIPS market at risk