During an CNBC appearance on Friday, Larry Kudlow, director of the National Economic Council, downplayed a tweet in which President Trump broke with decades of precedent and appeared to violate federal law by disclosing information about the May jobs report more than an hour before it was publicly released.
Looking forward to seeing the employment numbers at 8:30 this morning.
— Donald J. Trump (@realDonaldTrump) June 1, 2018
“He chose to tweet,” Kudlow said, adding that he briefed the president about the report on Thursday. “His tweet basically said like everybody else, ‘await the jobs numbers.’ You can read into that 10 different things if you want to read into it.”
“I don’t think he gave anything away, incidentally,” Kudlow added. “And I think [Trump’s tweet] is according to routine, as I say, law and custom.”
Kudlow might want you to believe Trump didn’t “give anything away” — but the financial markets had no trouble figuring out what the president meant when he said he was “looking forward” to seeing the report.
In the span of time between when Trump posted his tweet and when the jobs report was released, U.S. treasury yields shot up.
This is…unusual. Trump tweeted about jobs day at 7:21am EST, suggesting he knew the numbers would be surprisingly good. https://t.co/k35UPSEPI6 That's how the market took it anyway, with U.S. yields taking a leg higher right after. Raises a lot of questions. pic.twitter.com/TcN9oLNYqU
— Lisa Abramowicz (@lisaabramowicz1) June 1, 2018
It’s obvious that Trump — who last month made explicitly clear that for him, all news that casts him in a negative light is “fake news” — wouldn’t have posted such a tweet if the forthcoming jobs report didn’t reflect positively on him.
Possible illegality and concerns about insider trading aside, Trump’s tweet established a new and possibly problematic precedent. In the hours leading up to the release of future jobs reports, investors will watch carefully for clues provided by presidential tweets (or lack thereof).
“I think the markets certainly paid attention,” Aaron Kohli, a government bond market strategist at BMO Capital Markets in New York, told The New York Times. “And will do so next month should there be a tweet, or lack of one.”
Kudlow wasn’t the only White House official who attempted to downplay Trump’s tweet. Press Secretary Sarah Huckabee Sanders told reporters that she thought the president’s tweet was appropriate because “he didn’t put the numbers out.”
While it’s true that Trump didn’t disclose any specific numbers, it’s undeniable that the tweet foreshadowed good news to come. And that, in and of itself, was enough to move markets.