Is accidentally leaked information the only way we can get the truth about what the Fed staff really thinks? Apparently yes. Mish asks why anyone should be upset. After all, the truth is a good place to start to have a real discussion about how to manage our centrally managed economy.
Fed Staff Accidentally Posts Bearish Economic Forecast and Prediction Inflation Would Not Hit 2% by 2020; Upset Over Leaks? Why?
Courtesy of Mish
The Fed created quite a stir by inadvertently posting documents on its website. The documents revealed some expected things, as well as a few startling (but not to Mish readers) projections.
Please consider Fed Inadvertently Publishes Staff Forecast for 2015 Rate Hike.
Staff economists at the Federal Reserve expect a quarter-point U.S. interest rate increase this year, according to forecasts the Fed mistakenly published on its website in a gaffe that drew criticism about its ability to keep secrets.
Federal prosecutors are currently probing an alleged leak at the Fed of market-sensitive information to a private financial newsletter in 2012.
"It regrettably appears once again that proper internal controls are not in place to safeguard confidential Federal Reserve information," said Representative Jeb Hensarling of Texas, a Republican who chairs the House Financial Services Committee and is pressing Fed Chair Janet Yellen for documents regarding the 2012 leak.
The Fed said in a statement that the forecasts were "inadvertently" included in a computer file posted to its website on June 29.
Fed officials said the disclosure was due to procedural errors at a staff level and that the mistake was discovered on Tuesday this week. The matter has been referred to the Fed's inspector general.
"It is baffling that these leaks continue to occur," said Congressman Randy Neugebauer, a Texas Republican who chairs the House subcommittee on financial institutions and consumer credit.
Unintentional Projections
- One hike in 2015: The staff expected policymakers would raise their benchmark interest rate, known as the Fed funds rate, enough for it to average 0.35 percent in the fourth quarter of 2015. That implies one quarter-point hike this year, as the Fed funds rate is currently hovering around 0.13 percent.
- Inflation: the staff did not expect inflation to ever reach the Fed's 2.0 percent target. By the fourth quarter of 2020, they saw the PCE (personal consumption expenditure) inflation index rising 1.97 percent from a year earlier.
- Growth: The Fed's staff also took a dimmer view of long-run economic growth, expecting gross domestic product to expand 1.73 percent in the year through the fourth quarter of 2020. The views of Fed policymakers for long-term growth range from 1.8 percent to 2.5 percent.
Upset Over Leaks – Why?
Congress is upset over leaks. Is that what people should really be upset over?
Why? We should be happy to have a glimpse of what this secret sect thinks, discusses, and wants to hide vs. the spoon-fed crap they want us to hear.
…
[Picture of leak via Pixabay.]
