US DATA: Concentrated Private Payrolls Weakness, Trends Still Relatively Solid

US President Donald Trump posts on Truth Social, "I am appointing the Director of the Federal Housing Finance Agency, and Chairman of Fannie Mae/Freddie Mac, William J. Pulte, to serve as Acting Director of National Intelligence. William has deep experience managing the most sensitive matters in America, the safety and soundness of the Markets, and over 10 Trillion Dollars at Fannie Mae/Freddie Mac, a substantial increase from where it was just 12 months ago. During this period, he will remain Director of the Federal Housing Finance Agency, and Chairman of Fannie Mae/Freddie Mac..." 

• Outgoing DNI Tulsi Gabbard announced she will leave office on 30 June, citing her husband's bone cancer diagnosis. There had been speculation that Gabbard could be on the way out amid her sidelining from key foreign policy issues.
• Pulte, a Trump appointee with no institutional intelligence experience, was reported to be a key driver of the legal investigation into former Fed chair Jerome Powell. Reports also claim Pulte played a key role in Trump's controversial posting of an AI-generated image of the president as Jesus Christ healing the sick, and that he had an ill-tempered verbal altercation with Treasury Secretary Scott Bessent at a private dinner in 2025.
• As the security-focused new outlet Military.com notes, the new DNI "will likely play a major role in shaping how intelligence reaches the White House and how aggressively the administration responds to emerging threats. The position itself has grown increasingly political in recent years as intelligence assessments have become more publicly tied to debates over foreign intervention, election security and domestic extremism."

Context behind the headline on Cleveland Fed’s Hammack (’26 voter, hawk) not focusing on only one inflation measure, including a warning on ignoring tails (per the trimmed means or median that Warsh has proposed) when the economy is shifting. Recall that the PCE trimmed mean in particular continued to be much softer than core in Thursday's April release, at 2.35% Y/Y in the Dallas Fed’s version vs 3.29% Y/Y for core – see our bullet at the time here: https://mni.marketnews.com/4fmE2EL

Q: You have a very high-profile new colleague at the Fed, Kevin Warsh, the new chair. What have your early conversations with him been like? 

• “I had a conversation with him a few weeks ago. He is approaching the job with a real open mind, and I think he's asking a lot of first principles questions, which is a great thing to do. One of my favorite things about the role is that we do really deep analysis. […] I think he is a public servant who will come in with an open mind and try to do his best.”

Q: One of the big questions that he’s asking is how do you measure inflation? Explain to us what the difference is between how you measure it now and what he’s proposing?

• “I look at a lot of different measures of inflation, as I talked about in the speech, our preferred measure, the one that we've held ourselves accountable to, is the PCE price index. So that's one of the numbers that's related to GDP. It's a specific index. But there are another a number of other ways. There's the CPI. There's the PPI. You can look at it in headline, which means it includes everything. Or you can look at it in core, which usually takes out the volatile food and energy prices. What the incoming chair talked about in his hearing in front of Congress was that he's looking at what are called trimmed means or median inflation. Now in Cleveland, I don't know if we pioneered this, but we were one of the earliest who put forward one of these indices. And in the 90s, we put forward a trimmed mean inflation. So what that means is rather than taking out the food and energy, we're taking out the things at the way top and the things at the way bottom. What you're looking for in this is you're trying to get a better sense of what is that middle bucket doing, and how is that trending over time.”
• “So again, because I care about where the economy is today, but also where it's going to be in the future, sometimes you want to take out these big one offs. So it could be the oil prices right now, when there was like the avian flu that had like a huge impact on egg prices. So you want to think there are a number of different ways of trying to get at what is that longer term trend. So some people look at it taking out that food and energy. Some people do it taking out those tails of the super high and super low things. I look at all of these. I don't think we have the luxury of picking just one and staying maniacally focused on it, because it could be that you pick the wrong one and then you're making bad decisions. And so you need to really look at the full suite of indices that are out there and take their signals. For what it's worth, at times when the economy is shifting, you know, ignoring those tails could mean that you're missing out on some of that bigger picture of what's happening.”
• “So you have to really think about everything. And for me, our target that we talked about is, is the full the headline number. Because individuals experience all of it. And so I care about the core components because they may give me a better sense of the persistence and where inflation is going to go in the future. But I can't ignore that headline experience of everyday Americans who can't afford to buy ice cream because they don't have the extra $3 to buy ice cream and take their kids out for that, or they can't go to the store for a treat.”

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