Fed Accidentally Released Confidential Staff Projections (3)
2015-07-24 23:55:37.462 GMT
(Updates with Fed press release on corrected projections
in 12th paragraph.)
By Christopher Condon and Craig Torres
(Bloomberg) -- The Federal Reserve said it inadvertently
released staff projections for interest rates and the economy
late last month, renewing doubts about its measures to protect
confidential information.
The Fed said in a statement Friday in Washington that
projections prepared for the June 16-17 Federal Open Market
Committee meeting were posted in error on a public website on
June 29. Staff projections are normally released with a five-
year lag when transcripts of FOMC meetings are published.
The disclosure follows congressional criticism over the
Fed’s handling of a leak of internal policy deliberations in
2012, which is being investigated by the House Financial
Services Committee.
“It regrettably appears once again that proper internal
controls are not in place to safeguard confidential Federal
Reserve information,” Jeb Hensarling, the Texas Republican who
chairs the House panel, said in an e-mailed statement.
In a separate incident in April 2013, a member of the Fed’s
congressional liaison staff accidentally e-mailed a copy of the
minutes of an FOMC meeting to more than 100 people, including
bank lobbyists and congressional staff, about 19 hours before
the minutes were due to be published.
The latest mishap “does raise questions as to what
procedures are in place to safeguard confidential information
and to make sure there is fair disclosure of market-sensitive
data,” said Mark Vitner, senior economist with Wells Fargo
Securities in Charlotte, North Carolina.
Yields Fall
Short-term Treasury yields briefly fell after the Fed’s
disclosure Friday. The yield on the two-year note slid two basis
points, or 0.02 percentage point, to 0.66 percent before
rebounding. The yield was at 0.68 percent at 2:54 p.m. in New
York.
The Fed said Friday that on June 29, “an updated package
of code was posted that inadvertently included three files
containing staff economic forecasts that are confidential FOMC
information.”
The Fed said it has since “implemented procedures to
prevent inadvertent posting” of internal material, said Susan
Stawick, a spokeswoman for the central bank who didn’t provide
details. “We’re committed to taking further steps if needed,”
she said.
The mistake was spotted by a Fed economist on Tuesday,
according to a Fed official who spoke on condition of anonymity.
It was then brought to the attention of the FOMC’s
administrative staff on Wednesday evening, according to Stawick.
The matter has been referred to the Fed’s Office of Inspector
General.
Rate Outlook
The inadvertent release comes at a sensitive time for
markets as investors seek to anticipate the timing of the first
increase in the Fed’s benchmark interest rate since 2006. The
Fed has said it will probably raise the rate this year, without
specifying when.
Late Friday, the Fed issued a statement saying that some of
the projections released inadvertently were, in fact, not the
staff forecasts provided to policy makers in June. It released a
table with the corrected projections.
The staff projections show the federal funds rate at 0.35
percent in the fourth quarter of 2015, up from the current range
of zero to 0.25 percent. The Fed said the staff forecasts don’t
represent the views of policy makers.
All the same, the release sent analysts scrambling to
evaluate the significance of the forecast, with some saying that
it implied just one quarter-point rate increase before the end
of the year.
Fed officials’ forecasts released in June implied two rate
increases in 2015, with the benchmark lending rate finishing the
year at 0.625 percent, according to their median estimate.
Eight Meetings
Before each of the eight scheduled yearly meetings of the
FOMC, staff economists with expertise in everything from
durable-goods spending to inflation construct estimates for
gross domestic product, inflation and unemployment.
To avoid recommending an interest-rate path to policy
makers, staff use a mechanical approach to derive a fed funds
rate for a given period based on the broader outlook, according
to the Fed official.
The 0.35 basis-point projection for the fourth quarter of
2015, for example, is the prevailing interest rate for the
period, and it isn’t a recommendation for one or two rate
increases, the official said.
“Does it change anything for the outlook for the Fed? No,
absolutely not,” said Aneta Markowska, chief U.S. economist at
Societe Generale SA in New York. “The FOMC already had these
when they met in June and they published theirs already, so they
took this into account and said we disagree.”
For Related News and Information:
Banks on Fed Staffer E-Mail List Get Accidental Leak of Minutes
Yellen Resists Demands to Give Congress Fed Leak Documents Now
Fed Leak Handed Traders Profitable Tip, Prompted Secret Inquiry
Top Stories:TOP<GO>
Top Fed stories: FEDU <GO>
Global Economic Watch: GEW <GO>
Central Bank Rates: CBRT <GO>
--With assistance from Jeff Kearns in Washington and Alexandra
Scaggs in New York.
To contact the reporters on this story:
Christopher Condon in Washington at +1-202-654-4333 or
ccondon4@bloomberg.net;
Craig Torres in Washington at +1-202-654-1220 or
ctorres3@bloomberg.net
To contact the editors responsible for this story:
Christopher Wellisz at +1-202-624-1862 or
cwellisz@bloomberg.net
Alister Bull
2015-07-24 23:55:37.462 GMT
(Updates with Fed press release on corrected projections
in 12th paragraph.)
By Christopher Condon and Craig Torres
(Bloomberg) -- The Federal Reserve said it inadvertently
released staff projections for interest rates and the economy
late last month, renewing doubts about its measures to protect
confidential information.
The Fed said in a statement Friday in Washington that
projections prepared for the June 16-17 Federal Open Market
Committee meeting were posted in error on a public website on
June 29. Staff projections are normally released with a five-
year lag when transcripts of FOMC meetings are published.
The disclosure follows congressional criticism over the
Fed’s handling of a leak of internal policy deliberations in
2012, which is being investigated by the House Financial
Services Committee.
“It regrettably appears once again that proper internal
controls are not in place to safeguard confidential Federal
Reserve information,” Jeb Hensarling, the Texas Republican who
chairs the House panel, said in an e-mailed statement.
In a separate incident in April 2013, a member of the Fed’s
congressional liaison staff accidentally e-mailed a copy of the
minutes of an FOMC meeting to more than 100 people, including
bank lobbyists and congressional staff, about 19 hours before
the minutes were due to be published.
The latest mishap “does raise questions as to what
procedures are in place to safeguard confidential information
and to make sure there is fair disclosure of market-sensitive
data,” said Mark Vitner, senior economist with Wells Fargo
Securities in Charlotte, North Carolina.
Yields Fall
Short-term Treasury yields briefly fell after the Fed’s
disclosure Friday. The yield on the two-year note slid two basis
points, or 0.02 percentage point, to 0.66 percent before
rebounding. The yield was at 0.68 percent at 2:54 p.m. in New
York.
The Fed said Friday that on June 29, “an updated package
of code was posted that inadvertently included three files
containing staff economic forecasts that are confidential FOMC
information.”
The Fed said it has since “implemented procedures to
prevent inadvertent posting” of internal material, said Susan
Stawick, a spokeswoman for the central bank who didn’t provide
details. “We’re committed to taking further steps if needed,”
she said.
The mistake was spotted by a Fed economist on Tuesday,
according to a Fed official who spoke on condition of anonymity.
It was then brought to the attention of the FOMC’s
administrative staff on Wednesday evening, according to Stawick.
The matter has been referred to the Fed’s Office of Inspector
General.
Rate Outlook
The inadvertent release comes at a sensitive time for
markets as investors seek to anticipate the timing of the first
increase in the Fed’s benchmark interest rate since 2006. The
Fed has said it will probably raise the rate this year, without
specifying when.
Late Friday, the Fed issued a statement saying that some of
the projections released inadvertently were, in fact, not the
staff forecasts provided to policy makers in June. It released a
table with the corrected projections.
The staff projections show the federal funds rate at 0.35
percent in the fourth quarter of 2015, up from the current range
of zero to 0.25 percent. The Fed said the staff forecasts don’t
represent the views of policy makers.
All the same, the release sent analysts scrambling to
evaluate the significance of the forecast, with some saying that
it implied just one quarter-point rate increase before the end
of the year.
Fed officials’ forecasts released in June implied two rate
increases in 2015, with the benchmark lending rate finishing the
year at 0.625 percent, according to their median estimate.
Eight Meetings
Before each of the eight scheduled yearly meetings of the
FOMC, staff economists with expertise in everything from
durable-goods spending to inflation construct estimates for
gross domestic product, inflation and unemployment.
To avoid recommending an interest-rate path to policy
makers, staff use a mechanical approach to derive a fed funds
rate for a given period based on the broader outlook, according
to the Fed official.
The 0.35 basis-point projection for the fourth quarter of
2015, for example, is the prevailing interest rate for the
period, and it isn’t a recommendation for one or two rate
increases, the official said.
“Does it change anything for the outlook for the Fed? No,
absolutely not,” said Aneta Markowska, chief U.S. economist at
Societe Generale SA in New York. “The FOMC already had these
when they met in June and they published theirs already, so they
took this into account and said we disagree.”
For Related News and Information:
Banks on Fed Staffer E-Mail List Get Accidental Leak of Minutes
Yellen Resists Demands to Give Congress Fed Leak Documents Now
Fed Leak Handed Traders Profitable Tip, Prompted Secret Inquiry
Top Stories:TOP<GO>
Top Fed stories: FEDU <GO>
Global Economic Watch: GEW <GO>
Central Bank Rates: CBRT <GO>
--With assistance from Jeff Kearns in Washington and Alexandra
Scaggs in New York.
To contact the reporters on this story:
Christopher Condon in Washington at +1-202-654-4333 or
ccondon4@bloomberg.net;
Craig Torres in Washington at +1-202-654-1220 or
ctorres3@bloomberg.net
To contact the editors responsible for this story:
Christopher Wellisz at +1-202-624-1862 or
cwellisz@bloomberg.net
Alister Bull