Fed: Confidential forecasts mistakenly made public

AP News
Posted: Jul 24, 2015 7:45 PM

WASHINGTON (AP) — The Federal Reserve said Friday it mistakenly posted confidential economic projections on its public website last month.

In a brief statement, the Fed said it has asked its inspector general to investigate what it called an inadvertent disclosure.

The incident occurred at a time when the central bank is already the subject of investigations by the Justice Department, a House committee and its inspector general involving the disclosure of confidential information from a 2012 Fed meeting.

The economic projections posted on June 29 had been prepared by staff for the Fed's June meeting. Late Friday, the Fed posted a second set of projections saying it had discovered some errors in the first posting. The errors involved the Fed's forecast for overall economic growth, as measured by the gross domestic product, and inflation.

In a hastily arranged conference call with reporters, Fed officials said they had no immediate explanation for how the incorrect numbers got into the June 29 posting but that it would be one of the issues the Fed's inspector general would explore. The officials said they wanted to update the posting so that it would accurately represent the forecast presented to Fed officials at their June meeting.

Private economists said the staff forecast did not contain any surprising revelations about the Fed's views. The staff projections are prepared for the Fed's closed-door meetings and are not normally released for a period of five years.

The Fed said the mistaken posting was not discovered until Tuesday when it was noticed by a Fed economist.

The economic projections were included in a file that contained information on the computer model the Fed uses to forecast the economy. Once the mistake was discovered, the Fed said it decided not to remove the data since it was already public.

The Fed alerted the agency's inspector general on Thursday, and also notified officials at two agencies that regulate financial markets, the Securities and Exchange Commission and the Commodity Futures Trading Commission. It also informed the House Financial Services Committee, the panel that is conducting its own investigation of the 2012 leak.

"It regrettably appears once again that proper internal controls are not in place to safeguard confidential Federal Reserve information," said Financial Services Committee Chairman Jeb Hensarling, R-Texas, said in a statement. "To say these recurring leaks at the Fed are troubling is a serious understatement and points to the urgent need for accountability reforms."

The Fed, which will meet for two days next week, has kept its benchmark for short-term interest rates at a record low near zero since December 2008. Many private economists believe the first interest rate hike could occur at the September meeting, with some projecting another quarter-point move in December.