US DATA: AHE On The Soft Side, Especially Considering Lower Hours

National Economic Council director Kevin Hassett tells Fox Business that Treasury Secretary Bessent is leading the search for the next Fed Chair. He says of his own candidacy, which was mentioned by President Trump on Tuesday, that "if there's a future challenge that comes my way, I'd be happy to talk to [Trump] about it." He reiterates that he thinks the Fed should be easing amid "low" inflation and the recent "negative news on unemployment". Intriguingly he suggests that his philosophy of running the Board/FOMC would be more like the way Alan Greenspan (Fed Chair between 1987-2006) ran things. In other words, a more autocratic style of steering consensus, and one Hassett says would be less "partisan" in setting policy than the current Board.

• He acknowledges that the latest employment data is weak, and suggests that provides grounds to cut rates: "inflation right now is the lowest that it's been in over five years, and we just had some negative news on unemployment... And so the fact that the Fed hasn't moved against, like, really obvious data that would suggest that they should, is troubling."
• On the new Bureau of Labor Statistics head: "President Trump has no desire to hire people that are going to give him the numbers that he likes... we've got a number of candidates that everybody trusts, that's going to go in and try to put a second set of eyes on why these numbers have become so unreliable."
• He's asked about fellow Chair candidate Kevin Warsh's comment that the Federal Reserve requires "regime change", and says he agrees, pointing to what he says is its partisanship. He says "I think that the highest priority for the President, as with the BLS, is that the Fed be independent, it be data driven, it be transparent, and it make moves that are right for the American people, not necessarily the moves that are right for one party or the other. And I think that if you look at the pattern of the Fed movements over the last few years, you could wonder were they putting politics ahead of their mandate, you know, cutting rates right before the election for Kamala Harris and so on. And I'm sure that the President's candidates are going to be a lot different than what you've seen over the last couple years.... we've got a board now where the Democrats seem to be voting one way and the Republicans are voting another way."
• "The Fed is supposed to be a nonpartisan board that focuses on its dual mandates of unemployment and inflation, and when you've got a partisan divide that's really historically unprecedented, then you know that the leadership has failed. The job of the leadership is to drive a nonpartisan consensus at the board, and that's not what we're seeing right now. And so, of course, the board is going to have to change and the board is going to have to go back to the Alan Greenspan approach of driving consensus, having healthy debate, and if there's a move that looks like it might be interpreted as partisan then you become less likely to do it." we look back at Fed moves and found that they tended to not move right before election, because they didn't want to have the appearance of doing something to try to put their figure on the scale of the election, but then we've got these guys who are willing to do that. This is the kind of thing that has to change. I think Kevin Warsh is right about regime change."

Reuters carrying comments from advisor to Russian President Vladimir Putin, Yuri Ushakov, on the recently concluded meeting between Putin and US President Donald Trump’s chief negotiator, Steve Witkoff, in Moscow.

• Ushakov described the meeting as “useful and constructive” and said both sides sent “signals” to the other:  “From our side we have sent some signals. We have also received some signals from Trump.”
• Ushakov added that Putin and Witkoff discussed the 'Ukraine crisis' and “prospects for development of Russia-US relations. strategic partnership.”
• The meeting comes ahead o Trump’s Friday deadline for reaching a ceasefire agreement with Ukraine. Without an agreement, Trump has threatened sanctions on Russia and secondary sanctions on countries that buy Russian oil. However, Trump has vacillated on the scope of secondary tariffs, suggesting to reporters that he may not pursue the 100% rate he had previously proposed.
• While there is limited optimism for any progress toward a broad ceasefire agreement, the meeting could result in a short-term ‘air truce’ and lay the groundwork for more technical talks between Ukraine and Russia - potentially inching closer to an eventual meeting between Putin and Ukrainian President Volodymyr Zelenskky.
• Such an agreement could provide an offramp for both the US and Russia to diffuse a period of increasingly belligerent rhetoric.  

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