Fed staff economic projections leak

The Federal Reserve, already under fire from Congress over how a previous leak of sensitive information was handled, revealed Friday that confidential staff forecasts from its meeting six weeks ago were mistakenly put on its public website.

The forecasts do not represent the views of the central bankers who set America’s interest rate policy. The Fed projections assume a Fed funds rate of 0.35%, which implies one hike before year end.

Another headline that’s a bit of a shock is the Fed showing staff projecting inflation below 2% until 2020.

The Fed intervenes in markets to keep the rate at target, which it says is between 0 and 0.25 percent.

However, the statement stressed, “The projections that were inadvertently released are staff projections that do not incorporate policymakers’ views, including their views on monetary policy”.

That forecast was for the economy to grow between 2% and 2.3% annually in the years after 2017.

For 2016, the staff has the funds rate averaging 1.26% in the fourth quarter compared to the FOMC’s median year-end dot of 1.625%.

Staff present their projections to members of the Federal Reserve Board’s policymaking Federal Open Market Committee during meetings once every three months.

“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. The information is considered in the formal projections committee members make and release to the public at the end of the two-day meetings.

Because the projections already were made public, the Fed said Friday it was making the information “more easily accessible” on its website.

This story has not been edited by Firstpost staff and is generated by auto-feed.

Consistent with security procedures, the Fed said that the mistaken early release had been referred to the Board’s Inspector General.

Such information could be valuable to investors and traders and leaks are potentially illegal.

Some Republican members of the House Financial Services Committee, including Chairman Jeb Hensarling, have said the Fed did not properly handle an internal probe of an alleged leak of central-bank deliberations in the fall of 2012.