FT : Panama port owner’s deal fuels fears of dominance by world’s top shipping g

Panama port owner’s deal fuels fears of dominance by world’s top shipping group
CK Hutchison’s $23bn sale has raised worries of MSC’s increased control of global port infrastructure

A $23bn sale of ports by CK Hutchison has raised concerns in the logistics industry that the deal could hurt competition and disadvantage rivals by making the world’s biggest shipping company the top operator of container terminals globally.

The deal to sell 80 per cent of the Hong Kong conglomerate’s global ports portfolio to a subsidiary of the Mediterranean Shipping Company would hand the Swiss-Italian shipping line control over a critical amount of the world’s port infrastructure, some industry analysts and executives fear.

The impact of the sale is “massive”, said one port industry executive, with the proposed MSC agreement raising “significant concerns” among rival shipping lines about their long-term access to port infrastructure.

A consortium led by port operator Terminal Investment Limited — majority-owned by MSC — together with BlackRock’s infrastructure unit GIP in March agreed to buy stakes in 43 ports in 23 countries.

Hutchison struck the deal — which also includes the takeover of two Panamanian ports and already faces scrutiny by the Chinese government — following complaints from President Donald Trump that China was “running the Panama Canal”.

If approved by regulators, it will allow MSC — owned by the billionaire Aponte family — to leapfrog its main competitors in the ports business to become the world’s largest container terminal operator with a projected 8.3 per cent of global share, according to maritime consultancy Drewry.

“Considering [MSC’s] shipping business, this [deal could] potentially lead to reduced competition and higher barriers to entry for other players,” said Kun Cao at consultancy Reddal.


Another port sector executive said: “If you’re a shipping line and then your biggest competitor suddenly has all this [port] capacity, you’re naturally concerned because you don’t want to feed more revenue to your competitor, or risk that they’ll stop you coming or not give you the best berth windows.”

The person added that while shipping lines made 10 to 15 times more profit from shipping containers than the port terminals did from unloading them, the investment would allow them to “get rates higher, and squeeze capacity to make as much money as possible”.

The deal’s supporters noted that the Chinese owned a sizeable portion of global ports, with state-backed operators China’s Cosco and China Merchants holding a combined market share of more than 12 per cent.

They also pointed out that the deal would leave MSC with market share similar to its nearest rival, Singapore’s PSA International, which held 7.2 per cent in 2023.

However, analysts warned that the combination of being the largest shipping group and largest port operator potentially handed MSC a significant advantage over competitors.

The transaction will give MSC a major foothold in south-east Asia, Mexico — where Hutchison is the largest player with four terminals — and Europe, where Hutchison is the dominant operator in major ports including Rotterdam, according to Drewry.



Concerns over the huge expansion of MSC’s portfolio comes at a time when ports in Asia and Europe are already facing congestion challenges, while orders for new ships are at record highs as shipping lines reinvest soaring post-pandemic profits.

Analysts warned that pressure would only grow on container terminals as new ships come on stream, increasing the value of MSC’s newfound dominance if the Hutchison sale is confirmed.

Eleanor Hadland, Drewry’s senior associate in ports and terminals, said capacity growth for the port sector was now “significantly lower” than two decades ago, even as additional container shipping capacity was set to increase.

Another shipping industry executive noted that the MSC-BlackRock deal was part of a much wider process of vertical integration in the industry, for example, with companies such as Maersk, whose APM Terminals business exceeded the size of its own shipping fleet.

Two people close to the deal dismissed concerns over MSC’s growing dominance of the market, noting that the deal contained legal commitments to continue operating the terminals “without discrimination” and on the same basis as today.


But the Chinese government’s critical stance since March over the deal has also cast a shadow.

While the deal does not include CK Hutchison’s 10 ports in mainland China and Hong Kong, Beijing has criticised the transaction, saying it would undermine “national interests” by giving the US the opportunity to curb China’s shipping and trade.

China’s antitrust regulator has said it would launch a review into the deal. The consortium has held talks with China’s antitrust regulator, as it seeks to ensure their approval, the Financial Times reported this week.

MSC declined to comment.

Lars Jensen, chief executive of consultancy Vespucci Maritime, said fears of MSC abusing its position were overblown. “There’s undoubtedly a valuable competitive advantage for MSC here. But this deal will allow them to optimise their shipping operations, and make more money from their ships, not treat their competitors worse.”

Robbert van Trooijen, founder of shipping and ports advisory Inception Partners and a former Maersk executive, said as competition for port access grew, smaller operators still feared they might find themselves squeezed.

Nevertheless, he pointed out that concerns over vertical integration of carriers developing large ports and logistics portfolios “could be a difficult case to argue with regulators”.

Rico Luman, a senior economist at ING focusing on transport and logistics, said: “In times of heavy congestion and capacity shortage, such terminals [could] prefer the home carrier.”

Reddal’s Cao said with its influence over port infrastructure, MSC could gain access to sensitive shipping data that could be used to its competitive advantage.

Antitrust regulators, including those overseeing Rotterdam’s Hutchinson-owned leading container terminal operator, are likely to “take a keen interest in the transaction” given its size and scale, added Drewry’s Hadland. This would potentially extending the time needed to complete the deal.

A person with knowledge of the deal confirmed that antitrust concerns over some terminals — including Rotterdam — were “on our radar screen”.

The consortium was prepared to drop some ports if they faced antitrust concerns, they added.

“We may have to give up a terminal [here or there] . . . [and] we are going to be prepared to do that.”

FT : Chart and Flowserve agree $19bn merger to form gas and liquid technologies

Chart and Flowserve agree $19bn merger to form gas and liquid technologies leader
Merged group will be renamed and have its headquarters in Dallas

US industrials Chart Industries and Flowserve have agreed a $19bn all-stock merger, in a push to create a leading provider of products and services addressing the movement of liquids and gases for sectors including LNG, nuclear energy and data centres.

Chart specialises in handling gas and liquids at extremely low temperatures largely aimed at industrial clients, while Flowserve caters to water and chemicals companies, offering pumps, valves, seals and flow control products and services.

The $19bn deal, which includes debt, was framed by both companies as a merger of equals and would help it compete with bigger groups in the so-called industrial processing sector, including US rivals Parker Hannifin, Ingersoll Rand and Dover.

As part of the deal, announced on Wednesday, Chart shareholders will receive 3.1 Flowserve shares for every existing share they own, giving them control of 53.5 per cent of the combined group and Flowserve shareholders holding the remainder.

Scott Rowe, Flowserve’s chief executive, will run the combined company, and Chart’s CEO Jill Evanko will become chair of the board. Rowe said the merger would give the newly formed entity “scale and resilience”, including delivering up to $300mn of cost synergies over the course of three years.

The merged group — which will be headquartered in Dallas, Texas, and be given a new name — generated about $8.8bn in revenues in the 12 months to the end of March. More than two-fifths of that came from after-market services, such as repairs, maintenance and upgrades.

The deal comes as mergers and acquisitions activity has slowed significantly in recent months as companies, particularly in the industrials sector, grapple with the fallout of the policy on their complex, often global supply chains.

Flowserve executives told analysts in April that the “vast majority” of its products sold in the US are manufactured and assembled domestically. Similarly, Chart said it “primarily” manufactures in China for China and in the US for the US.

During their most recent earnings calls, Flowserve said the gross impact of President Donald Trump’s trade policy on earnings without any changes or mitigations would be between $90mn and $100mn, while Chart estimated it would be approximately $50mn.

Chart shares closed 9.5 per cent lower on Wednesday, while Flowserve dropped 6.3 per cent, giving the groups market capitalisations of $6.6bn and $6.2bn respectively.

Management said they expected the deal to close in the fourth quarter of this year and to yield revenue synergies over time, delivering about 2 per cent in additional growth.

FT : Donald Trump’s ‘big beautiful bill’ will swell US debt by $2.4tn, warns fis

Donald Trump’s ‘big beautiful bill’ will swell US debt by $2.4tn, warns fiscal watchdog
Administration insists legislation will slash the deficit

Donald Trump’s landmark tax bill will add $2.4tn to the US debt by 2034, the congressional fiscal watchdog has warned, in the latest blow to the president as he urges the Senate to back the legislation. 

The Congressional Budget Office said on Wednesday that what the US president has dubbed the “big beautiful bill” would drive up budget deficits over the coming decade, despite the administration’s insistence it would slash them.

The non-partisan estimate comes a day after billionaire Trump backer Elon Musk attacked the bill as a “disgusting abomination”, arguing that it would undo much of the cost-cutting work of his so-called Department of Government Efficiency. 

The figures will fuel a fight on Capitol Hill where Trump has sought to cajole fiscal hawks into supporting the bill after some expressed concerns over its potential impact on the country’s already bulging debt pile.

The Treasury bond market has grown from roughly $5tn in 2008 to $29tn today as the US has cut taxes while increasing spending. JPMorgan Chase chief executive Jamie Dimon warned last week that the bond market would “crack” if the country did not get on a more sustainable track.

After meeting Trump at the White House on Wednesday afternoon, John Thune, the Republican Senate majority leader, tried to stay upbeat about the legislation, despite new attacks from Musk who called on lawmakers to “kill the bill”. 

“The wheels are in motion on this,” Thune said, shrugging off Musk’s public rebukes. “Failure is not an option. We will get this done one way or other. It’s not going to be easy, it’s complicated.” 

The new legislation would extend tax cuts introduced by the president in 2017 while cutting social programmes, including Medicaid, which provides healthcare to low-income and disabled Americans. It would also raise the debt ceiling, or limit on government borrowing, by $5tn.

The CBO said on Wednesday that the bill would reduce tax revenues by $3.75tn over the coming decade, even as it cuts spending by $1.3tn. The number of people without health insurance would rise by 10.9mn.

The bill narrowly passed the Republican-controlled House of Representatives last month but now faces an uphill battle in the Senate. Trump wants to sign the bill into law by July 4.

The president’s Republican party controls the Senate by a 53-47 margin, meaning it can only afford to lose the support of three senators if the bill is to pass the upper chamber of Congress by a simple majority, given all Democratic senators are expected to vote against it.

The Trump administration has insisted that the legislation will trigger an increase in economic growth and says revenues from Trump’s tariffs had not been reflected in estimates of its fiscal impact.

The CBO report did not account for the macroeconomic effects of the legislation, but the watchdog said separately that it estimated the tariffs — as they stood in mid-May — could shrink the country’s debt by $2.8tn over the coming decade.

But it cautioned that the duties would drive up inflation by an average 0.4 per cent this year and next, while reducing real GDP growth by 0.6 per cent by 2035 as trading partners hit back. It said these estimates were subject to “significant uncertainty” as tariff policy could change.

Ahead of CBO’s assessment of the bill, White House press secretary Karoline Leavitt said the watchdog “has been historically wrong” and accused it of bias against Republicans.

“Unfortunately, this is an institution in our country that has become partisan and political, and we are very confident in our own economic analyses of this bill. There is $1.6tn in savings,” Leavitt said.

Democrats used the CBO’s report to slam the legislation. “This bill has gone from bad to worse,” said Ron Wyden, the top Democrat on the Senate finance committee.

“If Senate Republicans truly think this bill is the right direction for America, they owe it to Americans to defend it in public instead of ramming it through under the cover of darkness before they even know what it will do to their constituents,” he said.

FT : UK to unveil pension reform aimed at boosting retirement savings

UK to unveil pension reform aimed at boosting retirement savings
Parliamentary bill presented on Thursday set to include a ‘reserve’ power that could force schemes to invest more in Britain

Ministers will unveil a sweeping overhaul of Britain’s pensions system on Thursday aimed at unpicking problems created by previous rules and boosting the retirement savings of millions of people.

The pensions bill will cover six areas of reform and include a “reserve” power to force pension schemes to invest more in the UK if they fail to meet a voluntary commitment.

One of the most notable features of the bill — announced in the King’s Speech last July and the first since 2021 — will be the merging of defined contribution pension pots worth £1,000 or less into one scheme.

Ministers estimate the measure will boost retirement savings for the average worker by around £1,000, and save businesses £225mn a year in unnecessary administration.

The introduction of auto-enrolment in 2012 prompted a proliferation of small pots, with over 13mn in the UK now valued at £1,000 or less and around 1mn new small pots created each year. 

For those approaching retirement, the bill will require defined contribution schemes to offer clear default options for turning pension savings into retirement income.

Helping individuals appropriately draw an income from their savings has become a growing problem following “pensions freedoms” introduced by George Osborne in 2015 that allowed pensioners to collect their entire savings in a lump sum.

The move “has the potential to be one of the most significant interventions industry can make to help people maximise their savings,” said Gail Izat, a managing director at Phoenix Group’s Standard Life.

Pensions experts welcomed the proposals but noted there would be nothing included on increasing the amount of money being paid into long-term savings schemes, which is viewed as key to improving retirement wealth. 

Sir Steve Webb, a former pensions minister and partner at consultancy LCP, said the bill was “worthy” but ignored the “elephant in the room of inadequate pension savings”. 

The bill will also introduce a new system — which has been consulted on for years — to show how well pension schemes are performing under a “value for money” framework, to help savers assess the value of schemes against their peers.

Liz Kendall, work and pensions secretary, said the bill was about “securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in our country”. 

Other measures in the bill include new rules to make it easier for trustees of defined benefit pensions to release so-called surplus in schemes back to employers. 

It will also introduce a legislative framework for defined benefit “superfunds” that help DB schemes consolidate without having to meet the threshold to sell their assets and pension obligations to an insurer. 

Plans for multi-employer defined contribution “megafunds” of at least £25bn, laid out in the pensions investment review published last week, will also become law.  

Last month, 17 of the UK’s largest defined contribution pension providers pledged to invest at least 5 per cent of their assets in UK private markets by the end of the decade. Reserve powers in the bill to set asset allocation targets are designed to ensure this commitment is met.

The government had promised a review into pensions adequacy — expected to look into auto-enrolment rates — by the end of last year but it was delayed. Pensions minister Torsten Bell said last week it would be launched “soon”. 

Former minister Webb warned that it would take years for such work to produce results.

“Any legislation off the back of that review could take years to implement,” he said. “Time is running out for people already well through their working life to have the chance for a decent retirement.”

Reuters : Apple loses bid to pause app store reform order in Epic Games case

Apple loses bid to pause app store reform order in Epic Games case

June 4 (Reuters) - Apple (AAPL.O), opens new tab on Wednesday failed to persuade a U.S. appeals court to pause key parts of a federal judge's order requiring the iPhone maker to immediately open its lucrative App Store to more competition.

The 9th U.S. Circuit Court of Appeals rejected, opens new tab Apple's request to put the provisions on hold as the tech company appeals the judge's order, which came in a long-running antitrust lawsuit brought by “Fortnite” maker Epic Games.

U.S. District Judge Yvonne Gonzalez Rogers in April found Apple in contempt of an earlier injunction order she issued in the Epic Games case.
Apple in a statement said it was "disappointed with the decision not to stay the district court’s order, and we’ll continue to argue our case during the appeals process."

The judge on April 30 ordered Apple to end several practices that she said were designed to circumvent the injunction, including a new 27% fee Apple imposed on app developers when its customers complete an app purchase outside the App Store.

The court also prohibited Apple from restricting where developers place links to make purchases outside of an app.

>>> US After Hours Summary: VRNT +18.6%, MDB +13.6%, FIVE +3.8% higher on earnin

After Hours Summary: VRNT +18.6%, MDB +13.6%, FIVE +3.8% higher on earnings; PVH -6.3%, DSGX -3.7% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: VRNT +18.6%, PL +13.9%, MDB +13.6% (also increases share repurchase authorization by $800 mln to $1 bln), LWAY +5% (guides higher; also announces expanded distribution for several of its top-selling product lines), FIVE +3.8% (also CFO to step down), GEF +2.1%, AGX +0.6%

Companies trading higher in after hours in reaction to news: CBOE +1.4% (reports May volumes), ET +0.4% (BIS says license now required for the export of ethane), IPX +0.3% (awarded a $99 mln US Army contract), SBUX +0.2% (names new COO), RCI +0.1% (receives all league approvals to buy out Bell's 37.5% stake in Maple Leaf Sports), CIGI +0.1% (to acquire a controlling interest in Astris Infrastructure)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BARK -15.1%, PVH -6.3%, DSGX -3.7% (also announces cost reduction initiatives, including 7% global workforce reduction)

Companies trading lower in after hours in reaction to news: CGEM -5.7% (license agreement with Genrix Bio), BV -3.9% (files mixed shelf offering; also files for offering by selling shareholders), CYBR -2.6% ($750 mln convertible notes offering), SNDK -1.1% (SNDK announces launch of 17 mln share offering by WDC, its former parent; relates to debt-for-equity exchange), TMC -1% (TMC and Nauru announce updated sponsorship), AAPL -0.8% (unfavorable appeals court ruling for its App Store, according to Reuters), FOUR -0.5% (names new CEO), COST -0.4% (reports May comps), NMAX -0.4% (stock offering by selling shareholders), WDC -0.3% (SNDK announces launch of 17 mln share offering by WDC, its former parent; relates to debt-for-equity exchange), XPO -0.1% (reports May operating metrics), BEN -0.1% (reports May AUM), TRV -0.1% (files mixed securities shelf offering), UBER -0.1% (appoints PANW CEO Nikesh Arora to its board)

Hedge Week : AQR founder says ‘rational investing’ is back as quant funds surge

AQR founder says ‘rational investing’ is back as quant funds surge

Cliff Asness, co-founder of quant powerhouse AQR Capital Management, says markets are finally rewarding fundamentals again – marking a resurgence for systematic strategies that had long struggled in an era of speculative excess, according to a report by Bloomberg.


Speaking to Bloomberg Television, Asness said: “It’s been a tremendous return for basic rational investing,” adding that the market is favouring “good companies that are getting better, that aren’t too risky.” His comments come amid a backdrop of tariff-induced market volatility, which has bolstered many long/short quant stock-picking strategies.

AQR’s Equity Market Neutral Fund has returned approximately 15% year-to-date, according to Bloomberg data, in a sign that disciplined factor investing is back in favour. Asness noted that factors like quality, low risk, and momentum have all delivered strong results in 2025, while traditional value strategies have lagged.

This marks a sharp contrast to the pre-pandemic and zero-rate environment, which Asness had previously described as “bubbly,” where fundamentals were ignored and overpriced stocks continued to climb.

The firm’s flagship Apex Strategy, a multi-strategy vehicle managing roughly $3.9bn, gained 2.4% in May, bringing its year-to-date return to 10.6%, according to a person familiar with performance. Apex blends AQR’s core strategies, including stock selection, corporate arbitrage, and macro trades.

AQR’s Delphi Long-Short Equity Strategy, also with about $3.9bn in AUM, returned 1.8% in May and is up 13.9% in 2025, benefiting from investors’ broad flight to quality—a trend that has rewarded low-volatility, high-profitability companies.

The renewed performance follows a challenging decade for quant strategies, particularly those anchored in traditional academic investing principles. But with investor sentiment shifting and fundamentals regaining importance, AQR and other systematic managers are now seeing strong tailwinds.

WWD : Zadig & Voltaire Founders Acquire Maison Poiray and Aurélie Bidermann Jewe

Zadig & Voltaire Founders Acquire Maison Poiray and Aurélie Bidermann Jewelry Brands
Arnaud and Thierry Gillier will revamp the Poiray brand with an eye to a younger customer with aspirational positioning.

PARIS — Thierry and Arnaud Gillier, cofounders of fashion label Zadig & Voltaire, have acquired storied French jewelry and watch house Maison Poiray, as well as fine and costume jewelry brand Aurélie Bidermann.

The acquisitions were made through their holding company, Iéna Investissements, and mark a strategic expansion of the brothers’ footprint in the accessible luxury space beyond fashion.

The brands were part of a package deal, purchased from Jean Paul Bize’s private equity firm AMS Group. Financial terms were not disclosed.

AMS Group took a majority stake in the Bidermann brand in 2016 and Bidermann herself stepped into the creative director role of Poiray at that time. She departed the house in 2018, which has been operating without a design head since then.

The flagship boutique on Paris’ Rue de la Paix is slated for a revamp and expansion as one of the first priorities post-acquisition and international expansion is in the cards longer term. The Gilliers will also embark on a search for a new creative director in due time.

“We just closed last week, so we need a short time to have reflection and to develop a real strategy,” Thierry Gillier told WWD. “This is a long-term project to build the house.”

He emphasized Poiray’s heritage. “The opportunity came to the table and we thought about [the house’s] story, and wanted to come into that story,” he said. “It’s an old house and the idea to ‘re-pimp’ the house was very, very interesting.”

Founded in 1975 by François Hérail and Michel Ermelin, Poiray was named as a tribute to French couturier Paul Poiret. The brand is known for its signature interlaced heart motif and its Ma Première watch with interchangeable bracelets, as well as interchangeable stones on rings and other key pieces.

The Gilliers see opportunity to revitalize the brand by targeting a younger audience with an edgier, accessible luxury approach.

“This brand could be rock ’n’ roll too,” said Gillier, drawing parallels with Zadig & Voltaire’s positioning. “It’s a strong brand that is already working well. It is profitable, but we just have to, maybe, add some rock ’n’ roll into that and renew [it].”

He acknowledged that Poiray’s current clientele skews older, and a key goal is to revamp the brand’s appeal while preserving its heritage. “Luxury is in the midst of a big reshuffle,” said Gillier, and Poiray is uniquely positioned to appeal to aspirational younger customers who value storytelling.

In 1986, Nathalie Hocq, daughter of former Cartier chairman Robert Hocq, who also served as Cartier president of general development and design lead, joined Poiray. “As a result of her early work with the house, [Poiray and Cartier] share some of the same DNA,” Gillier said.

Positioning in an accessible luxury space will be key to the new owners’ strategy. For example, a small gold interlaced heart pendant retails for 850 euros, while a large rose gold and diamond version is priced at 13,190 euros. Watches range from 1,500 euros to more than 11,000 euros, with an average price point around 5,000 euros.

The brand’s fundamentals are strong, with growth of 20 percent year-over-year, the team said.

“We are not running after expanding [immediately],” Gillier said. “We are concentrating on organization, high quality, and design” as first priorities.

Poiray currently operates four standalone stores in Paris and has corners in key department stores Le Bon Marché, Printemps and Samaritaine Paris, in addition to being sold in multibrand jewelry boutiques throughout France.

Both Maison Poiray and Aurélie Bidermann will operate independently from ZV Holding, which oversees Zadig & Voltaire and cashmere label Pellat-Finet.

WSJ : Economists Raise Questions About Quality of U.S. Inflation Data

Economists Raise Questions About Quality of U.S. Inflation Data
Labor Department says staffing shortages reduced its ability to conduct its massive monthly survey

Key Points
  • Some economists question U.S. inflation data accuracy due to staffing shortages affecting survey precision.
  • The Bureau of Labor Statistics used less precise methods for guessing price changes in April’s inflation report due to hiring freeze.
  • Data issues could significantly affect economy, influencing social-security benefits, bonds and Federal Reserve decisions.

Some economists are beginning to question the accuracy of recent U.S. inflation data after the federal government said staffing shortages hampered its ability to conduct a massive monthly survey.

The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past.

Economists say the staffing shortage raises questions about the quality of recent and coming inflation reports. There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy.

To calculate the inflation rate, hundreds of government workers called enumerators fan out across cities each month to check how much businesses are charging for products like blue jeans and services like accounting, often by visiting bricks-and-mortar stores. Statisticians roll those figures together into the consumer-price index, a data stream that shows how the cost of living is changing for typical Americans.

If the government’s enumerators can’t track down a specific price in a given city, they try to make an educated guess based on a close substitute: say, cargo pants instead of slacks. But in April, with fewer workers on hand to check prices, statisticians had to base their guesses on less comparable products or other regions of the country—a process called “different-cell imputation”—much more often than usual, according to the BLS.

“They’re having to turn to less effective methods to fill in the blanks,” said Omair Sharif, an economist at advisory firm Inflation Insights. He said he has been busy with calls from professional traders who make bets on inflation in financial markets and are anxious about the data’s accuracy.

The inflation rate determines how much social-security benefits go up each year, and where federal tax brackets are set. Private-sector contracts such as wage agreements between companies and unions routinely reference the inflation rate. Payments on $2 trillion of inflation-protected federal bonds hinge on the inflation rate, as do yields on standard Treasury bonds. Businesses, investors and policymakers rely on the reading to guide their decisions. The Federal Reserve is laser-focused on inflation data when it sets interest rates for the country.

A handful of economists noticed quirks in the April data published May 13. When some asked the BLS for more information, government officials sent back an excerpt of an internal report.

“The CPI temporarily reduced the number of outlets and quotes it attempted to collect due to a staffing shortage in certain CPI cities,” beginning in April, the email read. “These procedures will be kept in place until the hiring freeze is lifted, and additional staff can be hired and trained.”

The Trump administration issued a hiring freeze on Jan. 20 for federal employees, and the Department of Government Efficiency, previously led by Elon Musk, cut thousands of federal workers through layoffs and buyouts. It couldn’t be determined if BLS employees were subject to those cuts.

The BLS and its parent agency, the Labor Department, didn’t respond to requests for comment.

Economist Alan Detmeister of UBS was among those who noticed that in the April inflation data, 29% of price guesses were made using different-cell imputation, almost twice as high as any month in the past five years.

The report showed that the rate of inflation cooled to a 2.3% rise over the 12 months through April, the lowest rate since 2021. Detmeister said it is impossible to tell whether the reliance on different-cell estimates skewed the data in one direction or the other.

“When you take a sample and reduce the numbers, it’s going to increase the sampling error,” Detmeister said. “We don’t know if this is a big issue or a small issue, but we just know that directionally, it’s making things worse.”

The quality of U.S. economic statistics has been the envy of global policymakers for decades. The system is the product of concerted efforts that began in the depths of the Great Depression to better understand how the economy works.

“Being able to track what’s going on in the economy is very, very important,” Fed Chair Jerome Powell said at a policy conference earlier this year. “It’s something that the United States has led in for a long, long time, and something we need to continue to lead in.”

The concerns around the consumer-inflation survey follow other government-statistics issues that have worried economists in recent months. In May, the BLS suspended publication of hundreds of data series showing wholesale prices for products including some furniture and kitchen utensils. On Tuesday, the BLS said that it had applied incorrect sample weights to the survey of households the unemployment rate is derived from in April. It said the error had a negligible impact.

For years, advocates have warned that government funding for economic statistics has been falling short. Concerns about data quality grew this year after the Trump administration disbanded committees of external experts convened to help improve government stats.