Key takeaways

• Years of government funding cuts are undermining the U.S.’s position as a global leader in providing the reliable statistical information that businesses and policymakers need for sound decision-making.
• The Trump administration has accelerated the funding cuts and worked to degrade the effectiveness and independence of data-collecting agencies.
• The Bureau of Labor Statistics (BLS) is a prime example of an agency whose data collection in areas like employment and wages is integral to our understanding of the economy’s health and whether it is heading into a recession.
• A decline in response rates to one of the BLS’s key surveys was already underway but, absent funding increases and survey modifications, it will be harder for economists and policymakers to make timely sense of changes in the labor market.

Historically, the U.S. has been a leader in providing reliable and timely statistical information to support business strategy and policymaking. The value of information provided publicly and free of charge to businesses, households, and governments is immense. Yet underinvestment over the past 15 years is a key reason why the U.S. lost its position on the cutting-edge of public statistical services worldwide.

Since the beginning of the second Trump administration, this underinvestment has accelerated, and the administration has made intentional efforts to degrade the effectiveness and independence of the federal statistical agencies (FSAs). This accumulation of threats to the effectiveness of the FSAs will rapidly degrade the value of the key public good they provide, unless policy changes course sharply.

This blog post provides just one example of how cumulative underinvestment has blocked the ability of a key FSA to respond to developments, making its data less reliable over time. The Bureau of Labor Statistics collects a range of necessary data tracking the performance of the U.S. labor market. This BLS data are a key input into high-stakes decisions across the U.S. economy—including for both public and private actors. For example, the Federal Reserve relies on BLS data about unemployment rates, payroll job growth, wage growth, and price indexes to set monetary policy. The more volatile the BLS data are from month to month, the worse the information that guides Federal Reserve decisions.

Private industry also relies heavily on these statistics. A 2018 survey conducted by the National Association for Business Economists found that 95% of businesses responded “yes” to the question: “Are government data important for analyses and forecasting that drive business decisions?” Employment and unemployment data produced by the BLS were rated as the most important data source for informing business decisions.

Yet over the past 15 years, the BLS has gradually lost personnel and funding, which has been undermining their mandate of producing timely, accurate statistics on wages, prices, and the labor market. More recently, the Trump administration’s choices to freeze BLS hiring has further strained Census field staff charged with collecting household survey data. Worst of all, the Trump administration took the unprecedented step of firing the commissioner of the BLS simply because the agency accurately reported data that the administration happened to find politically inconvenient.

Even without further blatant political pressure on the BLS’s independence, the agency will encounter growing difficulty in doing its job effectively in coming years. One of their most important efforts is the fielding of the Current Population Survey (CPS), a survey of thousands of households across the U.S. taken every month, which provides detailed employment and wage information. The CPS is the source data for the monthly estimate of the nation’s unemployment rate, for example. This is in turn a key criterion for assessing whether the economy is heading into recession. In recent years—after the COVID-19 pandemic—the response rates for the CPS have sharply declined. These declines, if not countered with greater investment in response rates, may make it harder for economists and policymakers to make timely sense of changes in labor market, particularly for populations that already have small sample sizes, such as rural areas or detailed demographic groups.

The rest of this blog post highlights the problem of falling response rates, demonstrates that they have made some labor market measures more volatile month to month, and shows that these falling response rates have occurred over the same period as the retrenchment in resources for the BLS.

Nonresponse reduces sample size in the Current Population Survey

The Current Population Survey asks questions about employment and other labor market characteristics to 60,0000 households or about 110,000 individuals every month. Between 2005–2016, the Current Population Survey household survey was able to steadily receive responses from around 107,000 people, ages 16 and older. However, as noted by others and shown in Figure A, the number of households responding to the survey has declined since the mid-2010s and then fell precipitously after the COVID-19 pandemic. In the first few months of 2026, just over 75,000 individuals, ages 16 and older, had responded to the monthly CPS.

Figure A

The decline in response rate has likely occurred for a few reasons. The Bureau of Labor Statistics notes that the rate of refusals had been increasing as early as the 1990s, likely as the world became more connected with computers and the internet, leading to less reliance on in-person interactions to conduct business. Social trust has also gone down over the past few decades, and the share of adults who agree that “most people can be trusted” has decreased by more than 15% since 1984.

More recently, the COVID-19 pandemic, coupled with concerns for privacy and distrust in the government, may be the reason that the rate of decline grew in recent years. The COVID-19 pandemic forced many workers to transition to remote work, and concerns about contagion limited overall social interactions, making response collection increasingly difficult. Additionally, concerns about privacy or retribution from the state felt by groups like immigrants may make some people more reluctant to answer questions for fear of deportation. 

Finally, distrust in the federal government, fueled by recent overtly political activity, could be behind some of the reduction in response rates. For example, when the Bureau of Labor Statistics published two consecutive months of large negative revisions to the number of payroll jobs in mid-2025, the Trump administration leveled charges—which were baseless and never backed up by any evidence—that the BLS had manipulated the data for political purposes and fired then Commissioner Erika McEntarfer. People are less likely to trust government if they think publicized information and facts are politically motivated. 

Smaller sample sizes are linked to less precision in key labor-market estimates

If the size of sampled households is large enough, declining participation does not have to significantly affect the reliability of statistics produced from the survey. However, if declines in participation reduce usable sample sizes too much, this can lead to estimates with less precision, which can reduce researchers’ ability to parse a signal from statistical noise in a timely manner, especially for economically vulnerable groups.

For example, because the unemployment rate for Black workers is volatile, it can be difficult to accurately diagnose labor market softness for this group. If the sample size is too small to generate statistical precision in each month, researchers will require increasingly more months of data to be able to diagnose labor market softness, which could jeopardize the timeliness of proper policy responses to support the labor market.

Every month, the Bureau of Labor Statistics publishes statistical significance summary tables, identifying whether changes in labor force indicators are statistically significant at the 90% level. BLS publishes these statistical significance tests for dozens of indicators across several demographic groups, including for Black workers. We collected these tables over time and documented the margin of error needed in order to claim a 1-month change in unemployment was statistically significant, shown in Figure B.

While the margin of error that is needed to claim a change is statistically significant varies with the level of unemployment rate, the reduction in precision from lower response rates is evident when we hold the unemployment rate constant. The two red lines in Figure B identify the effect size needed to claim statistical significance for a change from a starting unemployment rate of 7.3%. In November 2017, when the sample size of the labor force was 63,346, a 0.66 percentage point change in unemployment would have been considered a statistically significant change. In April 2026, when sample size of the labor force decreased to 45,416 respondents, a 0.84 percentage point change in unemployment is required to claim statistical significance.

If the declines in survey participation are not random across the U.S. population, estimates may also be biased, which runs the risk of conveying inaccurate information about the state of the economy. For example, if nonresponse is more likely to occur among unemployed respondents compared with employed respondents, the statistics derived from these samples may suggest labor market softness when there is none. These concerns are already materializing: The Census reported that nonresponse had biased income statistics from the CPS Annual Social and Economic Supplement upward by 2%–3% since 2020.

Researchers and field staff at Census and the BLS are aware of potential concerns of bias in their estimates and do their best to weight estimates using population counts from administrative data and other sources so that these issues don’t happen. However, if sample size declines continue on this trajectory, the BLS will need to create new methodologies and sampling strategies, all of which will require funding.

Steady throttling of BLS funding makes all decision-makers—public and private—less well informed

The declining precision of estimates in the Black unemployment rate is just one of the key indicators affected by a BLS that lacks resources to respond effectively to growing data collection challenges. Achieving a larger sample size for key surveys requires a well-functioning and well-funded BLS with personnel who can take on the challenges of administering surveys in the 21st century. Yet this is the exact opposite of what is happening. Figure C shows that from 2005 to the present, the staffing at the BLS went from roughly 2,500 employees to just over 2,150, a drop of about 15%.

Figure C

Funding has followed a similar trajectory. Since its high-water mark in 2010, the BLS budget has declined from $810 million to $636 million in inflation-adjusted terms, a decrease of 20%. These cuts don’t hurt just the estimates generated by the Current Population Survey. In the past couple of years, the BLS has been forced to reduce data collection for the Consumer Price Index and to discontinue certain Producer Price Indexes in an effort to cut costs. At a time when affordability and price changes are top of mind for U.S households and businesses, depriving public and private decision-makers of accurate and timely information about prices makes little sense.

Increased funding would allow the BLS to maintain all their current functions and implement new procedures to address declining sample sizes. In 2023, BLS began to modernize the collection process of the CPS to improve response rates by allowing online self-completion of the survey and other collection process improvements for certain data products. This BLS initiative is happening in parallel to similar initiatives in several other countries undertaking modernization efforts. The United Kingdom, the Netherlands, Australia, and Canada have all received funding to launch similar modernization efforts for their own household surveys to address declining response rates. However, the BLS requests for increased funding for the modernization efforts have not been fully granted.

The decision to steadily defund the BLS is especially striking when weighed against the large economic benefits provided by the agency and other federal statistical agencies. The BLS provides up-to-date precise estimates of economic indicators that policymakers and business leaders alike rely on. Previous research finds that increased economic uncertainty can have negative effects on the economy, proving the important role that the BLS plays. Moreover, some economists have estimated in 2025 that the BLS generates economics benefits of about $25 for every $1 spent on the agency’s budgets. The 2025 FY BLS budget was approximately $636 million, meaning the BLS currently generates about $15.9 billion in economic benefit. Across all agencies, in FY 2022, the combined budget request for statistical agencies was $7.1 billion or 0.3% GDP, yet the benefits have been measured to be around $770 billion.

Conclusion

At a time when more information on the economic and social well-being of people and communities is needed, not less, funding the BLS should be a top priority. Addressing nonresponse will require substantial effort and creativity to counteract declining levels of social trust and anti-government sentiment. It will, for example, require public campaigns to convey that information provided to the BLS is confidential and safe, and changes in methodology to render the correct statistical adjustments, such that the statistics generated are unbiased. 

Rather than tackle these challenges head on however, the Trump administration put forward a proposal that would reduce the number of statistics about rural and less populous substate areas that could be published without running the risk of disclosing personally identifiable information. These proposals are a lazy solution to the real but solvable problem of making public data widely available and fully confidential. They would provide less information on the economic and social well-being of citizens, likely leading to delays in accurately diagnosing economic and social problems.

When agencies like the BLS are underfunded and understaffed, they aren’t able to conduct the critical functions of their agency or serve the public to the degree their mission entails. Funding for these organizations shouldn’t be up for debate, given how strong of an economic benefit they deliver.

Josh Welsh of Benefits and Pensions Monitor reports plan sponsors move slowly on AI despite efficiency promise:

Despite all the noise that AI is making in pension and benefits administration, several experts suggest its presence is smaller and more cautious than the hype suggests.

According to Sean Liss, investment consultant at HUB International, AI adoption among plan sponsors has been uneven. Yet, while strategy-level use remains thin, record keepers have started applying generative AI to improve member-facing platforms, making benefit sites easier to navigate and investment content more digestible.

The goal, from a plan sponsor's perspective, is driving engagement and financial literacy among members, though Liss cautioned the technology is still finding its footing.

"It's still a work in progress, but they're making a little bit of ground there," he said.

Gen AI could simplify outdated pension plan sites

"Right now, we're in an age where attention spans are pretty short and pension plans want their members to be educated on their plan. That’s either through understanding their risk tolerances or the investment options that are available to them. But the sites aren’t always easy to navigate," said Liss, adding generative AI could close that gap by simplifying site layouts and making investment content more accessible, which in turn could boost member engagement and plan literacy.

"Those are all things that plan administrators want to see," he added.

Faulty AI output threatens plan member trust

Meanwhile, Sebastien Betermier, finance professor at McGill University and executive director at International Centre for Pension Management (ICPM), identified three AI applications gaining traction in pension administration. The first is automating the note-taking and debriefing process during member calls, allowing engagement officers to cycle through requests faster and maintain a searchable record of interactions. The second is deploying AI-powered bots to field routine member questions without tying up staff.

But the third, he suggests, is trickier because it's not about using AI at all. It's about controlling what AI tells plan members.

"Oftentimes pension funds will find that their members get their information from elsewhere like a social group or social media or AI aggregators but the information is not necessarily correct and that’s dangerous because by then it’s too late," said Betermier.

"What's doubly dangerous is if you have social media picking up on a fund acting and the information is not necessarily correct, but then I come in as another member and I use ChatGPT to say what goes on in my fund because I know they'll quickly summarize and get the information. The aggregated information may actually be wrong,” he added, noting that leaves funds racing to ensure their own content is what AI tools surface first because members "might not even come to the website. They might only interact with their own AI machine," said Betermier.

"This is more making sure that in the age of AI, members are getting the correct information from you in a way that is efficient, but in a way that doesn't just create all kinds of weird rumors, and then everything gets bypassed," Betermier added.

Liss agreed, flagging faulty AI output as one of the biggest risks facing the space right now. Fiduciary responsibility, he noted, doesn’t shift when plan administrators delegate tasks to a record keeper or an AI tool because accountability stays with the plan.

Yet, that concern laps onto a broader worry both speakers share: trust.

"The biggest asset a pension fund has is trust above and beyond the assets it actually does manage. If you lose trust, you lose a lot of credibility in the eyes of the member," said Betermier.

While Liss expects AI integration to accelerate, he underscored that organizations need to understand both the risks and the fact that liabilities remain theirs regardless of what technology sits between them and the member.

AI efficiency gains hinge on governance and liability

Still, Betermier suggests the expected productivity gains from AI are real, but only if the implementation is handled with proper governance and data protections in place.

"I think AI has profound effects because it can make us much more efficient at several tasks that used to take more time. It has to be done really well. You cannot move too fast into it. I know funds are taking their time to make sure that it's done well," said Betermier.

Liss agreed that while AI will drive efficiencies, he argued its limits are baked into the nature of the work, particularly as "AI doesn't have emotion and emotion has a role in investing as well and making people comfortable with the decisions that they're making," he said.

On the consulting side, he sees potential in making quarterly reports - covering industry trends, economic data, and fund performance - more accessible to HR leaders, CEOs, and CIOs who oversee pension plans. For instance, he points to features like clickable definitions or scannable term explanations could replace the need to dig through an appendix.

He expects AI to eventually help with drafting member communications and consolidating information on the administrative side but emphasized that anything resembling advice should stay out of AI's reach.

Still, he draws a parallel to the early internet, which expanded access to information without eliminating the need for human judgment. He expects AI to follow a similar path.

"There'll always be a need for the human perspective," he said. 

It's a slow week in Pension Land so let me cover this topic which Sean Liss and Sebastien Betermier cover well.

I'm by no means an AI expert -- far from it -- but like any other tool in the pension toolkit, if it's used properly, it can add significant value on several fronts: asset management, pension administration, communications, finance, legal, IT and sustainable finance.

But it's still early days in the AI world and adoption, and while implementation is critically important, from a governance standpoint, it presents all sorts of risks.

There is no point in rushing it through, as AI models are changing from month to month. 

You can have test pilots in various sections of your pension plan but you need to measure outcomes properly and make sure there is value added.

Having said this, I see how AI can enhance productivity from an investment point.

This morning, I had an exchange with an investment advisor who uses Claude to screen stocks, using parameters he specifies.

I said to him I wish I can use Claude to go through my top funds' quarterly activity and then use my weekly and daily chart parameters to see which ones are making meaningful breakouts.

He took a handful of biotech and cybersecurity stocks I mentioned and then ran them through his parameters and sent me a report.

Of course, I then have to pull the trigger or not, but it's an amazing tool when used properly. 

I asked him if everyone starts using Claude, will alpha disappear and he replied:

No, but it will move. What disappears is the alpha that comes from processing public information faster or more thoroughly than the next person. What survives, and may even grow, is alpha rooted in things a model can't hand to everyone equally. Sure, news, earnings reactions, filing, etc gets in the universe more faster. What doesn’t disappear is the advisor alpha. Proprietary info, behavioral edges and judgment especially on novel situations will prevail.

So no, AI will not replace portfolio managers or analysts; it will help them become more productive at their work (the same for doctors, lawyers, accountants, etc.).

You still need brains and human judgment and interpretation.

But how you implement and adopt AI and measure outcomes across pension funds is critically important.

I keep coming back to this and unfortunately, many pensions don't even have an AI strategy or roadmap.

Anyone can say "we look at the risks and opportunities of AI" but what does that mean in practice and how are outcomes measured?

Below, as pension plans face growing pressure to adopt AI, many are pausing to ensure it’s implemented with the right governance and fiduciary oversight. This 45-minute discussion from the Berwyn Group explores both the opportunities and the risks, with a focus on practical, real-world application.

Barbara Shecter of the National Post reports pension CEOs at home and abroad hail summit as positive starting point:

Global investors that came to the Canada Investment Summit over two days in Toronto this week did not pour money into the 167 project touted the deal book presented, but the head of one of Canada’s largest pension funds says many left armed with the intention to do more in this country.

“I think if you came expecting to leave with a project in hand, you’re probably over-optimistic … (but) I judged, from the people I spoke to, that most people left with a really positive inclination towards coming back to do more,” said Jo Taylor, chief executive of the $303.2-billion Ontario Teachers’ Pension Plan Board.

“There are enough real projects around to keep good momentum on the nation-building concept, and actually demonstrating to local and international investors there’s something to do now.”

That was true for Annette Mosman, chief executive of one of Europe’s largest pension funds, APG Groep N.V. of the Netherlands, which has €639 billion under management.

In an interview on the sidelines of the summit, she said she learned about projects in sectors that interest her fund and at a size and scale that warrant further due diligence.

“The overarching themes like defence, energy, digital — we recognize them completely from a European perspective,” she said. “I think Canada now is a bit quicker compared to Europe, making it more tangible.”

In particular, she cited Prime Minister Mark Carney’s conviction to make Canada an energy superpower and his announcement Tuesday that the federal government plans to invite pension funds to invest tens billions of dollars in the country’s four largest airports.

“There are more concrete investible assets, so the conditions are better,” she said. “There are concrete investible assets of relevant size if you look at companies like ours with (hundreds of billions of euros in) assets under management.”

APG has some investments in Canada, including a $328-million stake in Hydro One purchased on behalf of pension fund ABP, and Mosman said she met the utility’s CEO, Megan Telford, at the summit.

She declined to put a timeline on when APG might invest more money into Canada, and added that some of the projects of interest aren’t yet sufficiently concrete.

“We have conditions,” Mosman said, adding that, like all pension funds, hers has a duty to assess risks and to protect the funds that belong to pensioners.

“Our teams can look at the projects, our teams can talk with Canadian pension funds, and then do their analysis like we always do,” she said. “We don’t do politics, so … whether it’s defence, whether it’s digital or energy, it’s depending on the structure, it’s depending on the governance, it’s depending on the returns.”

Mosman APG is hoping to make investments that have attributes like Hydro One: predictability in a regulated environment, stable cash flow and a long-term horizon.

“That fits our liabilities and what’s good for the pensioners, and I heard a lot of examples (like) that,” she said. “Airports is also an example of such infrastructure.”

She said the U.S. is a very good market for her fund and will remain so, but she is increasingly looking at Canada as distinct from its southern neighbour.

“We are diversifying. We always have been diversifying globally (but) maybe have seen North America as one market, and I think that’s changing,” she said. “So it’s now Canada and U.S, and the risks are different in the U.S. Having heard today what Canada can deliver or may deliver, I think then it will add up to better opportunities.”

Mosman said she already has ties with Canada’s business community through the Hydro One investment and with Canada’s pension executives who, she said, share a similar culture with the Dutch fund. They have already worked together outside Canada. In 2020, for example, APG and Canada Pension Plan Investment Board participated in a $1-billion joint venture with ESR Cayman Ltd. to invest in and develop an industrial and warehouse logistics portfolio in Korea.

Recent pledges by Canadian pension funds to bump up their investments in Canada could provide further co-investing opportunities for her fund in this country, she said.

“We do that already, but more abroad in other countries,” she said.

The summit also provided a deeper opportunity to meet with provincial premiers and learn about additional projects within their jurisdictions, Mosman said.

John Graham, chief executive of the Canada Pension Plan Investment Board, one of the co-hosts of the summit, said that is exactly what the gathering, organized by the federal government alongside CPP Investments and PSP was meant to achieve.

“This is not like a trade fair where people are going to go and buy tires or something,” he said “These are big, complicated transactions…. This is about long-term investing, getting the right capital into the country.”

He said the summit was also a showcase for many Canadian corporations, including energy and mining firms, which could benefit from exposure to global investors.

“From an investor perspective … sometimes the easiest way to invest in a country is through the public markets,” he said.

“They can buy their shares, they could buy their debt, and then if you have companies that are very capex intensive, they can help support that through various means, through debt, equity, or some other form of capital.”

Graham said the nuts and bolts of getting a deal done is often underestimated, particularly when it comes to infrastructure.

“We’ve been investing in infrastructure for almost 20 years around the world. These are big, complicated investments,” he said, adding that there is often a government component to contend with as well.

“You have to do it right, and you ultimately have to land on something that’s win-win for everybody.”

On Tuesday, CPP Investments and Brookfield Asset Management Ltd. announced a $50-billion Maple Fund to make large-scale investments in critical infrastructure and strategic industries across Canada over the next five years.

Graham said although it was announced on the final day of the two-day summit, it has been in the works much longer.

“We’ve been working on opportunities with them, and we had this idea quite a while ago, long before the summit,” he said. “It gives us access to a best-in-class partner, and, for Brookfield, it gives them opportunity to basically raise funds … or to use the funds they have.”

The Maple Fund will target project values of greater than $5 billion in equity capital, and was designed to allow other investors to partner with the pair on individual investments to further expand the capital available.

Last week, PSP and the Ontario teachers’ pension plan both announced a bump in domestic investments in the coming years.

Taylor said the decision at Teachers’ to invest an additional $10 billion in Canadian public and private markets by the end of 2027 and to announce it both felt like the right thing to do.

“This wasn’t forced on us. It was actually something we chose to do, and we chose to do it because it’s the right time to say it,” he said, noting that the new investments will come on top of about $100 billion that the fund has already invested at home.

“Why hold it back if you’re going to make that investment? Why not be positive and actually very much assertive that this is the right thing for us.” 

I already covered the inaugural Canada Investment Summit last week here, but I like the perspectives in this article from domestic and foreign pension fund CEOs.

OTPP's CEO Jo Taylor said people who came expecting to leave with a project at hand were over-optimistic but they let with a positive view of the summit and future opportunities.

I'm not going to lie, I was expecting some more big announcements on privatizing assets, especially airports, but I guess we will have to wait for the massive bureaucratic machine in Ottawa to get things going (pretty sure Michael Sabia is on that).   

CPP Investments' CEO, John Graham points out that for many investors, the easiest way to invest in a country is via public equities and bonds.  

Obviously, the larger a fund is, the more risk appetite for large private market assets.  

Annette Mosman, CEO of APG (featured at the top of the post) which already has a big stake in Hydro One, was very explicit in stating that they're looking for the right conditions to invest in Canada, namely, in assets that fit their liabilities and she mentioned airports.  

Anyway, the Summit is over, now comes the hard work ahead of execution and delivering projects that domestic and foreign investors are looking for.

I agree with everyone who says what comes next is critically important. 

If we wait another year to announce projects, it would be a grave mistake.

As James Bradshaw of The Globe and Mail notes, the Summit attracted all the right people, but will it bear fruit? That remains to be seen.

At the end of the day, it's all about outcomes. That's my measure of success.

So, I agree with John Mckenzie who rightly notes Canada must turn investment summit momentum into certainty and execution. 

Lastly, on October 22, PSP Investment's CEO Deb Orida will be joining Goldy Hyder, CEO of the Business Council of Canada, for a timely conversation about Canada’s investment moment and what comes next:

That should be an interesting discussion. 

Alright, let me wrap it up there.

Below, Canada's first ever Investment Summit being held in Toronto this week, was a message to global investors that Canada is open for business and ready for the big leagues. Canada's largest pension fund already plays there. John Graham is the CEO of CPPIB, the investment arm of Canada Pension Plan. 

On this episode, he speaks with host Amanda Lang about the opportunities Canada needs to show the rest of the world. Listen carefully to his insights.

Sean Conlon, Chloe Taylor, Justina Lee and Sarah Min of CNBC report the Dow falls Friday and posts worst week since March as Treasury yields rise:  

The Dow Jones Industrial Average slid on Friday as traders wrapped up a volatile week and navigated rising Treasury yields and elevated oil prices along with the Federal Reserve’s first rate hike in three years.

The 30-stock Dow shed 95.40 points, or 0.18%, to close at 51,682.64. The S&P 500 rose 0.17% to end at 7,650.50, while the Nasdaq Composite advanced 0.39% to settle at 26,522.55.

Treasury yields increased, weighing on equities. The 10-year yield, which climbed above 5% to hit its highest level since July 2007 earlier in the week, briefly rose back above that threshold after sliding Thursday. It was last up almost 6 basis points at 5.006%.

U.S. crude oil finished the week relatively unchanged but remained above $100 per barrel. On Friday, West Texas Intermediate crude futures fell 1.58% to settle at $100.30 a barrel. Global benchmark Brent crude futures dropped 0.91% to close at $103.87 a barrel.

With Friday’s moves, the major stock averages notched a mixed week. The Dow posted its third straight losing week, sliding 1.7% for its worst performance since March. The S&P 500 was off about 0.1%. Only the tech-heavy Nasdaq posted a gain, up 0.7%.

U.S. markets staged a comeback on Thursday after the Fed’s decision to raise rates by a quarter percentage point — with the suggestion of at least one more rate increase this year — drove major market averages lower Wednesday.

But Thursday’s rally, especially in technology stocks, suggests investors are eager to look past the prospect of a higher-for-longer rate environment, returning instead to an artificial intelligence story that should continue to bolster corporate profits.

“Some uncertainty was removed this week when the Fed hiked rates,” said Scott Welch, chief investment officer at Certuity.

But Welch doesn’t think that the latest hike was a one-and-done move. In fact, he believes a rate hike cycle is just beginning and could dampen equity performance over the coming months.

“At some point, whether it’s October or after the elections, I think the Fed will hike at least one more time in 2026 and probably another time or two in 2027,” he said.

With that in mind, Welch forecasts that the pressure on Treasury yields will continue to be up. He also anticipates that oil prices will remain elevated for the next few months.

“While I’m not bearish on the market, I do think we’re kind of in a chug-along environment for the rest of this year,” the investment chief added.

This was a week marked by the Fed's rate hike. Everyone was expecting it but Fed Chair Kevin Warsh surprised markets with his hawkish presser, focusing more on rising inflation and hinting that more rate hikes lie ahead.

I'm a little skeptical that the Fed will hike again this year, given midterms are in November, but the market is tilting this way, for now.

A lot can happen from now till the end of October at the Fed's next meeting, so I'm more in the wait-and-see camp; let the data come in before rubber-stamping another rate hike.

If employment remains robust and inflation reports come in hotter-than-expected, then the Fed will likely increase. But again, I am far from convinced it will happen this year.

Alright, in other news, stocks were mixed this week, with Healthcare, Communications Services and  Information Technology leading the pack: 

Utilities. Financials and Real Estate were hit the hardest as bond yields rose.

In terms of stocks, here are the top-performing US large cap stocks this week (full list here): 

And here are the worst-performing US large cap stocks this week (full list here):

It is also worth remembering we are at the end of the quarter, when large funds all over the world rebalance their portfolios. That too adds to the price action/ volatility we see in stocks.

Lastly, the rise in long bond yields is a global phenomenon and that is unnerving many investors:

⚠️ Global bond yields are trading at levels NOT SEEN since the Global Financial Crisis:

The Bloomberg Global Treasury Index yield has surged to ~3.9%, its highest level since 2007, as the global bond selloff accelerates.

By comparison, yields fell below 0.5% during the 2020… pic.twitter.com/Gp6gPZpv9u

— Global Markets Investor (@GlobalMktObserv) September 17, 2026

But we should also remember that the economy is strong, rates have normalized to historic levels and while elevated bond yields worry some investors, they lower future liabilities for pension plans and offer real choice relative to stocks for investors looking to lock in good yield.

Will something break in the credit markets? It's possible; right now, I do not see it.

Below, the Federal Reserve raised its benchmark interest rate Wednesday for the first time since 2023 in an effort to quell stubbornly-high inflation, a move that could spur a sharp response from the White House. Listen to Fed Chair Kevin Warsh's presser where he discusses their views.

Next, Ed Yardeni, one of the biggest stock bulls on Wall Street, talks about why he's slashing his year-end forecast for the S&P 500 Index to 7,900 from 8,400. He also says the Federal Reserve could raise interest rates two more times this year. Yardeni says Iran is likely to wreak havoc and keep oil prices elevated. He speaks on "Bloomberg Surveillance."

Lastly, members of the CNBC Investment Committee debate how to navigate the inflation risks to the rally.

This piece was originally published in The Journal of the Center for Policy Analysis and Research (JCPAR). Read it here. 

Introduction

For Black Americans, public-sector employment has historically provided a pathway to better, more equitable and secure job opportunities compared with available private-sector jobs. The federal government has played an especially vital role in establishing a robust Black middle class in the Washington, D.C. metro area. According to the 2023 American Community Survey, roughly 2 out of 5 Black adults in the D.C. metro area were college graduates, Black median household income was nearly $90,000 and the Black homeownership rate was 52.8%. Postal service jobs have been particularly valuable to Black workers without college degrees because of the uniform wage and benefit structure (all postal employees who have the same job title and job tenure are paid the same nationwide) and higher pay relative to comparable private-sector employment. With a minimum education requirement of a high school diploma, the median hourly wage of a postal worker is 43% higher than the typical high school graduate. While federal employment has opened the door to social and economic mobility for generations of Black Americans, it has often been the battleground and served as a compass in setting higher labor standards and equal employment policies in the United States.

Opportunity. Backlash. Resistance. Change: A brief history of Black federal workers

The history of Black workers employed in the federal government dates to the Civil War when the federal government hired its first Black employee in the Treasury Department in 1863. In time, the federal government quickly became the largest employer of formerly enslaved people, with large concentrations in the military and the U.S. Postal Service (USPS). By 1912, the federal government was the largest employer of Black Americans in the nation, including highly skilled Black workers who were hired in high-ranking white-collar positions.

One of the earliest actions aimed at weakening the position of Black federal workers came shortly after the inauguration of President Woodrow Wilson. In 1913, Wilson racially segregated the USPS and Treasury department—the first federal agencies to employ, and in the case of USPS, promote Black workers to management positions. The administrative practice of segregating the federal workforce extended to the demotion of Black civil servants from white-collar positions, at-will firings, and refusal to fill open jobs with qualified Black candidates. Later that year, a group of Black workers formed the National Alliance of Postal Employees, the first industrial union in the federal service, to resist the administration’s racist tactics.

In the 1940s and 1950s, Presidents Franklin D. Roosevelt, Harry S. Truman, and Dwight D. Eisenhower each issued executive orders that took measured steps to undo the overtly racist and discriminatory federal employment practices put in place by Wilson. Those orders were largely directed at national defense industries, armed forces, and government contractors in response to the demands imposed by World War II. But, throughout the 1950s and 1960s, civil rights activists pushed the federal government to do more to expand its hiring of Black workers. In response, President Eisenhower’s Executive Order 10590 established the President’s Committee on Government Employment Policy (PCGEP) in 1955. The PCGEP involved federal agencies more fully in the government’s anti-discrimination agenda and called for departments to develop regulations in accordance with its mission to stop all discrimination in all federal employment. However, the group lacked the enforcement power necessary to accomplish that mission.

Over the following decades, job prospects for Black federal workers were most improved by a series of executive actions and legislation introduced in the 1960s and 1970s. On March 6, 1961, President John F. Kennedy’s Executive Order 10925 required the federal government and federal government contractors to practice non-discrimination in their hiring practices. Additionally, E.O. 10925 established the President’s Committee on Equal Employment Opportunity (PCEEO) to monitor non-discrimination on government contracts. In a move that distinguished the PCEEO from prior ineffective, enforcement-lacking efforts like Eisenhower’s PCGEP, Kennedy granted policy-making authority to the group led by Vice President Lyndon Johnson and Secretary of Labor Arthur Goldberg.

On January 17, 1962, Kennedy signed Executive Order 10988 which allowed limited collective bargaining for federal employees for the first time and opened the door to federal employee union membership under three different classifications: informal, formal, and exclusive recognition. Public-sector collective bargaining would play a central role in maintaining the quality and accessibility of federal jobs through labor contracts that fostered transparency with clearly defined policies and pay structures. Labor contracts also served to limit discriminatory outcomes while providing critical protections and recourse against other forms of exploitation or mistreatment.

The power of Kennedy’s executive orders was reinforced when Title VII of the historic Civil Rights Act of 1964, signed by President Lyndon Johnson, formally prohibited employment discrimination in the United States and established the Equal Employment Opportunity Commission (EEOC) to enforce the law. The Equal Employment Opportunity Act of 1972 extended Title VII protections to cover more employers and strengthened the enforcement power of EEOC by allowing them to litigate against employers, including federal agencies, who violated Title VII.

Within the span of the 1960s and 1970s, the federal government had established a clear definition of what it meant to be an equal opportunity employer, leveraged its purchasing power to compel private contractors to meet similar standards, extended limited collective bargaining rights to federal workers, and assigned the EEOC a central role in enforcing anti-discrimination law. Black federal employees also continued to support and advocate for one another, establishing the non-profit organization, Blacks in Government (BIG), in 1975. The progress made during 1960s and 1970s would be gradually chipped away in the decades that followed. 

Federal job losses since the 1980s

During the 1980s, the Reagan administration took a swipe at federal employees, unions, and anti-discrimination enforcement, but that record pales in comparison to more recent developments. While Reagan announced plans to make federal job cuts, and infamously fired 11,000 striking air traffic controllers in the early 1980s, federal payrolls actually rose by more than 200,000 during his presidency before dropping by 427,000 during the 1990s and taking another hit of 244,000 between 2010 and 2014. Since the 1980s, the postal service, a major employer of Black workers, has been under sustained assault, including attempts to undercut employee compensation and the agency’s solvency.

In 2025, the Trump administration took steps to implement massive cuts to the federal sector and reverse course in the government’s pursuit of equity by rescinding at least a dozen prior executive orders related to racial and/or gender equality and terminating workers in DEI departments within federal agencies. In a series of legally challenged actions, Trump fired decisionmakers at the EEOC and National Labor Relations Board (NLRB)—rendering two independent agencies responsible for enforcing workers’ rights non-operational for several months—while his newly created Department of Government Efficiency (DOGE) made severe staff reductions and eliminated entire federal agencies. Trump’s attacks on the federal workforce have also included attempts to limit the approval of collective bargaining agreements with federal workers. The actions of Trump and DOGE contributed to the loss of 288,000 federal jobs between January and December of 2025, based on data from the Bureau of Labor Statistics. Ironically, while federal jobs once provided Black workers relatively more job security, early evidence suggests the burden of federal job cuts has fallen disproportionately on Black women. The potential consequences of these actions go beyond job losses and include major implications for Black family incomes and racial and gender pay equity.

An accounting of the significance of federal sector employment for Black workers and families

As detailed in the history presented above, between 1941 and 1981, Black workers gradually improved their employment status in the federal government through collective and individual activism of groups like the National Alliance and Blacks in Government, within a context of official support for their rights through executive orders and landmark civil rights legislation. This improved employment status expanded the ranks of Black federal workers who were able to secure higher incomes. By 1970, the median household income for Black families was just $6,279 compared with a range of $7,178–$10,987 for those earning GS 5–8 salaries in the federal government. In fact, Black federal employees compensated between grades GS 5–8 were either close to or slightly above the national median of $9,867. This remains a factor today as the high concentration of federal employment and related professional job opportunities in the Washington, D.C. metro area helps to make metro D.C.’s Black median household income ($89,912 in 2023) one of the highest in the nation and well above the overall national median of $77,719.

Analysis of 2024 state-level data from the Office of Personnel Management (OPM) reveals that over 300,000 federal workers (excluding USPS) reside in the D.C. metro area, accounting for 60% of all federal workers in the District of Columbia and surrounding states of Virginia, Maryland, and West Virginia. Black workers are just over one-fourth of the federal workforce in the District of Columbia (28.8%), Maryland (27.9%), and Virginia (26%). While the D.C. metro area is home to the largest concentration of federal workers, over 90% of the federal workforce live and work outside the nation’s capital. Black workers account for at least one-fifth of the state’s federal workforce in 12 states beyond the D.C. metro area.

Implications of massive federal job losses and the unfinished business of equity

To understand the stakes of federal workforce contraction, it is necessary to compare the demographic and wage structure of federal employment with that of the broader labor market. As shown in Table 1, in 2023 and 2024, Black workers were 12.5% of the private-sector workforce, compared with more than a fifth (22.6%) of all workers in the federal sector—a share that also exceeds their representation in the entire public sector (16.4%) which includes state and local governments. Black women’s share of the federal workforce (12.8%) was double their share in the private sector (6.4%).

A national comparison of hourly wages at the median and for low-wage (10th percentile) workers demonstrates the clear monetary benefit of federal over private-sector employment. Figure A shows this is true across race and gender both at the middle and lower end of the wage distribution. The hourly wage of a typical (i.e., median) Black federal worker is more than 40% higher than that of the median Black worker in the private sector. Black federal workers—median and 10th percentile—also have higher wages than same gender white workers in the private sector. It is worth noting that these wage comparisons don’t account for the more generous benefits typically offered to federal and other public-sector workers, which further raises the value of their total compensation. The higher wages earned by federal workers largely reflect the higher share of college and advanced degree holders and higher rates of union coverage relative to private-sector employees. Less than 7% of private-sector workers are in a union or covered by a union contract compared with 35.9% of all public-sector workers and 29.5% of federal workers (see Table 1). While greater union coverage helps to boost wages and benefits for all workers, it is an even more important factor in raising wages of those for whom racial and gender discrimination further restrict individual bargaining power.

Another factor contributing to better pay outcomes in the federal government is the use of the Schedule (GS) pay scale which applies to over 70% of white-collar federal jobs. This helps to mitigate pay discrimination in the federal government by standardizing the qualifications and compensation associated with a specific position and consistent with experience, job performance, and local cost of living. On average, Black federal workers appear to experience only marginally improved pay equity over Black workers in the private sector, while the Black-white wage gap is much smaller in the public sector, overall.

In the federal sector, Black workers earn 12.6% less than white workers with the same levels of education, experience, union coverage status, gender, and state of residence, compared with 14.9% less in the private sector and just 3.8% less in the overall public sector (see Table 2). Although there is a sizable wage gap between Black women and white men across sectors, the federal sector gap (26.1%) is nearly 8 percentage points lower than the gap that exists in the private sector (33.9%). Given enforcement of the GS pay scale, remaining racial and gender pay gaps among federal workers likely reflect disparities in job positions and associated GS levels, a long-documented concern of Black federal worker advocates and activists. These disparities may stem from the underrepresentation of Black workers in higher-level, higher-paying positions, which can reflect differences across agencies in workforce demographic composition, occupational structures, and promotion rates. Notwithstanding the relatively higher economic position of many Black federal workers, these results epitomize the unfinished business of eliminating pay inequity and occupational segregation across all sectors of the labor market.

Conclusion

This brief summarizes the important role federal-sector employment has played in providing better job opportunities for Black Americans than have traditionally been available in the private sector. However, those outcomes have never been a given. A solid history of advocacy and activism by and on behalf of Black federal workers alongside others were critical in securing important wins through executive actions and policy change. Moreover, pushback against some of the most egregious violations of federal worker’s civil and worker rights have at times resulted in stronger, more broadly enforced labor and equal employment standards, improving outcomes to the benefit of all workers.

 Investing.com reports Ares, PSP Investments form $2.4 billion U.S. logistics venture:

NEW YORK & MONTREAL - Ares Management Corporation (NYSE:ARES) and the Public Sector Pension Investment Board announced today the establishment of a joint venture to invest up to $2.4 billion in U.S. logistics real estate, according to a press release statement.

The partnership combines an Ares Real Estate fund with PSP Investments, one of Canada’s largest pension investors with C$320.6 billion of net assets under management as of March 31, 2026. The joint venture will target cash-flowing assets in high-growth markets.

The venture includes a seed portfolio of 5.2 million square feet comprising 14 properties across California, Texas and New Jersey. Marq Logistics, Ares Real Estate’s logistics platform, will lead sourcing and manage the assets within the joint venture. Marq Logistics manages a portfolio of over 2,250 properties totaling more than 655 million square feet.

"This joint venture with a leading institutional investor like PSP Investments underscores the strong positioning that Ares has established across our U.S. logistics footprint," said Dave Fazekas, Head of North America Logistics in Ares Real Estate.

Laurence Bastien, Managing Director, Real Estate Investments, Americas at PSP Investments, stated: "The U.S. logistics sector benefits from durable demand drivers and structurally constrained supply in the submarkets that matter most."

Eastdil Secured Savills acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to Ares. Cushman & Wakefield acted as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor to PSP Investments.

As of June 30, 2026, Ares Management Corporation had over $671 billion of assets under management with operations across North America, South America, Europe, Asia Pacific and the Middle East.

On Wednesday, PSP Investments and Ares issued a joint press release stating they are establishing a joint venture to invest up to $2.4 billion in US logistics real estate (all figures in US dollars):

NEW YORK and MONTRÉAL – September 16, 2026 – Ares Management Corporation (NYSE: ARES), a leading global alternative investment manager, and the Public Sector Pension Investment Board (“PSP Investments”), one of Canada’s largest pension investors, announced today that an Ares Real Estate fund (“Ares”) and PSP Investments have established a new joint venture to invest up to $2.4 billion in logistics real estate opportunities in the U.S.

The joint venture combines Ares Real Estate’s vertically integrated logistics investment capabilities and established sourcing network across its extensive footprint with PSP Investments’ scaled capital and shared conviction in the U.S. logistics sector. The joint venture will target attractive, cash-flowing assets in high-growth markets and includes a 5.2 million-square-foot seed portfolio comprising 14 high-quality properties across key U.S. industrial hubs, including California, Texas and New Jersey. 

Marq Logistics, which represents Ares Real Estate’s vertically integrated global logistics real estate platform and is a leader in the development and operation of modern logistics facilities, will lead sourcing and manage the assets within the joint venture. 

“This joint venture with a leading institutional investor like PSP Investments underscores the strong positioning that Ares has established across our U.S. logistics footprint,” said Dave Fazekas, Head of North America Logistics in Ares Real Estate. “The acceleration of onshoring, buildout of digital infrastructure and growing influence of ecommerce continue strengthening the investment fundamentals for strategically placed logistics facilities. We are proud to expand Ares’ longstanding relationship with PSP Investments as we leverage our collective scale and experience to identify compelling deployment opportunities and deliver value for tenants, communities and investors.” 

“Best-in-class operators, in sectors where our conviction is strongest — that is what our real estate strategy is built around, and this joint venture has both,” said Laurence Bastien, Managing Director, Real Estate Investments, Americas at PSP Investments. “The U.S. logistics sector benefits from durable demand drivers and structurally constrained supply in the submarkets that matter most. Partnering with Ares allows us to invest in high-quality assets at scale and alongside an operating platform with the capabilities to drive value at the asset level.” 

Eastdil Secured Savills acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to Ares. Cushman & Wakefield acted as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor to PSP Investments. 

All figures in U.S. dollars unless otherwise noted. 

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, real estate, private equity and infrastructure asset classes. We seek to advance our stakeholders' long-term goals by providing flexible capital that supports businesses and creates value for our investors and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of June 30, 2026, Ares Management Corporation's global platform had over $671 billion of assets under management, with operations across North America, South America, Europe, Asia Pacific and the Middle East. For more information, please visit www.ares.com. 

About Marq Logistics

Marq Logistics is a global leader in the development and operation of modern logistics facilities and manages a portfolio of over 2,250 properties totaling more than 655 million square feet. With a mission to deliver institutional-quality logistics facilities and a consistent, best-in-class experience to customers around the world, Marq Logistics’ highly specialized and dedicated team provides a powerful combination of global scale with local expertise. Learn more about Marq Logistics at www.marqlogistics.com. 

About PSP Investments 

The Public Sector Pension Investment Board (PSP Investments) is one of Canada's largest pension investors with C$320.6 billion of net assets under management as of March 31, 2026. It manages a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources, and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal public service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or LinkedIn.

PSP Investments and its strategic partner, Ares, are entering into a significant real estate deal.

As stated in the press release, the joint venture will target attractive, cash-flowing assets in high-growth markets and includes a 5.2 million-square-foot seed portfolio comprising 14 high-quality properties across key US industrial hubs, including California, Texas and New Jersey.  

Dave Fazekas, Head of North America Logistics at Ares Real Estate states it well:

 “The acceleration of onshoring, buildout of digital infrastructure and growing influence of ecommerce continue strengthening the investment fundamentals for strategically placed logistics facilities. We are proud to expand Ares’ longstanding relationship with PSP Investments as we leverage our collective scale and experience to identify compelling deployment opportunities and deliver value for tenants, communities and investors.”

Moreover, Laurence Bastien, Managing Director, Real Estate Investments, Americas at PSP Investments, explains why entering this JV with Ares was critical:

“Best-in-class operators, in sectors where our conviction is strongest — that is what our real estate strategy is built around, and this joint venture has both. The US logistics sector benefits from durable demand drivers and structurally constrained supply in the submarkets that matter most. Partnering with Ares allows us to invest in high-quality assets at scale and alongside an operating platform with the capabilities to drive value at the asset level.” 

Recall, CPP Investments recently took up almost a fourth (US$968 million) of Ares' US$4 billion Japan Logistics Development Partners V LP (JDP V). That massive commitment means CPP Investments is an anchor investor in this fund, allowing it to capitalize on opportunities in the explosive growth of Japanese logistics properties (see my comment here).

Whether it's logistics properties in Japan, the US, or elsewhere, Marq Logistics, Ares Real Estate’s vertically integrated global logistics real estate platform, is a proven leader in the development and operation of modern logistics facilities.

That is why you are seeing CPP Investments and PSP Investments entering into big joint ventures with Ares or anchoring their fund to create a logistics platform. 

Marq Logistics will lead sourcing and manage the assets within the joint venture with PSP. 

That's what you want when entering a big joint venture, a top strategic partner co-investing alongside you, sourcing and managing these assets.  

Anyway, take the time to watch a clip here where Dave Fazekas, Head of North America Logistics, Ares Real Estate (featured above), shares his view on why they search for the best risk-adjusted returns in the industrial real estate sector (2024).  

Below, Head of Ares Real Estate Julie Solomon takes the stage at Bloomberg Invest to unpack the forces reshaping real assets amid rapid data center and AI demand. The panel explores why logistics, multifamily and self storage are benefiting from demand for New Economy sectors, how AI and e commerce are transforming global supply chains, the influence of power scarcity on digital infrastructure and the key factors that differentiate successful investors in a competitive market. More in the full interview.

Very smart lady; listen carefully to her insights.