Simone Foxman of Quartz examines ways that reporters covering the Federal Reserve Board could release its news before the embargo in the wake of news this week that some traders were able to access the information early.
Foxman writes, “But those rules aside, the Fed takes few precautions to ensure the statement doesn’t leave the room early. Reporters are not required to surrender their cellphones, and they can bring computers into the room and connect to the internet before the release. The journalists are supposed to use their own systems to transmit the news at 2 p.m. and not a moment before, but there’s little to stop an early transmission.
“For instance, a reporter could send a report to his news organization before 2 p.m., and have it scheduled to publish at the right time. But in the interim, the data has physically left the room. That’s officially against the Fed’s rules, but because reporters have open access to the internet, it’s plausible. CNBC asked several news organizations whether they transmitted data before 2 p.m.; two said they did not and two others declined to answer.
“That arrangement contrasts with the Commerce and Labor departments, which require journalists to connect to the internet through ‘black boxes’ that prevent data from physically leaving the lock-up room until the appointed time. While the boxes are not fool-proof, they are at least a precaution, which the Fed doesn’t take.
“Commerce and Labor use the term ‘lock-up’ to describe their procedures for giving journalists early access to data releases. But in interviews, officials at the Fed and Treasury said their system shouldn’t be described that way.”
Read more here.