Fed needs to tighten policies in the wake of media leaks

The Federal Reserve needs to improve the way it handles the release of sensitive information generated by its board of directors and policy-setting committee in the aftermath of media leaks, according to an Inspector General report, writes Kate Davidson of The Wall Street Journal.

Davidson writes, “The Fed routinely shares such releases with news media before releasing them to the public under embargoes, meaning the news organizations agree not to publish their reports of the information until a certain time.

“In June 2015, a board employee inadvertently posted a confidential staff economic forecast on the Fed’s public website five years before it was supposed to be released.

“In August 2015, a news organization published information on the minutes from a policy meeting before its designated release time. Bloomberg LP acknowledged that it was the outlet that inadvertently sent a headline ahead of the embargo. In that case, the IG said, the board’s management controls for releasing sensitive information weren’t followed.

“Two more incidents in July and September of this year, after the IG’s April audit report, ‘highlight the need for the board to continue to improve its management controls,’ the IG said.

“In July, embargoed information from the Fed’s policy committee was released early.

“In September, the report said, a news organization published embargoed economic information prior to the designated public release time. The organization was Dow Jones Newswires, which inadvertently published a headline on August industrial production data 7 minutes before its scheduled 9:15 a.m. release. The IG report didn’t name the news outlet.

“A spokesman for Dow Jones & Co., publisher of Dow Jones Newswires and The Wall Street Journal, declined to comment on the incident or the report.”

Read more here.