Yellen Says She Welcomes Inquiry Into Leak of FOMC DetailsCraig Torres and Christopher Condon
Federal Reserve Chair Janet Yellen said she welcomes an investigation into a 2012 leak of confidential details on monetary-policy decision making.
Bloomberg News previously reported that potentially market-moving inside information about the Federal Open Market Committee’s September 2012 meeting were published by Medley Global Advisors in a report to clients on Oct. 3 that year, one day before the Fed released minutes of the gathering.
“The committee and I personally take very seriously our responsibility to safeguard confidential information,” Yellen said Wednesday in Washington.
The Fed’s inspector general is investigating. “We welcome that review and are looking forward to its conclusions,” she said in a press conference following a meeting of the FOMC.
Yellen also rebuffed an accusation made last week by Representative Jeb Hensarling, the Texas Republican who chairs the House Financial Services Committee, that Fed officials had quashed an initial inquiry by the Fed’s general counsel, Scott Alvarez, into the leak.
“That is an allegation that I don’t believe has any basis in fact,” Yellen said. “I’m not going to go into the details, but I don’t know where that piece of information could possibly have come from.”
Hensarling made the claim in a March 13 letter to the Fed chair in which he demanded information related to the leak and the Fed’s initial investigation.
“It is my understanding that although the Federal Reserve’s general counsel was initially involved in this investigation, the inquiry was dropped at the request of several members of the FOMC,” he wrote.
The Fed chair and her inspector general, Mark Bialek, are under increasing congressional pressure explain the results of their probes of a leak of confidential information regarding one of the most aggressive monetary policy actions in history.
Hensarling said last week he had been informed by the Fed’s inspector general that “there is currently an open criminal investigation” into the leak.
Fed officials can use the inspector general’s revival of the case, and its elevation to a criminal probe, as a shield against congressional questioning. Yellen said the Fed had no intention of avoiding lawmakers’ scrutiny.
“With respect to Congress, congressional inquiries, we have arranged to brief members of Congress who’ve asked about this and will certainly cooperate in trying to provide them the information that they seek,” she said.
Julia Lawless, a spokeswoman for Orrin Hatch, who chairs the Senate Finance Committee and who wrote to Yellen on March 11 seeking more information about the leak probe, said the Utah Republican “appreciates Dr. Yellen’s commitment to wanting to get to the bottom of this and looks forward to learning more details.”
The FOMC’s September 2012 policy debate about additional stimulus stemmed from Fed concern that hiring had stalled.
To spur the economy, then Fed Chairman Ben S. Bernanke initiated a third round of quantitative easing on Sept. 13, announcing the Fed would buy mortgage securities at a pace of $40 billion a month.
The September meeting was a half-step toward what would become a major policy escalation by the U.S. central bank. In December, the FOMC decided to add $45 billion of monthly Treasury purchases to its bond-buying campaign.
“The minutes of September’s meeting will show, however, that the groundwork for further action in coming months has been laid and that labor-market improvement is unlikely to be substantial enough to stave off new Treasury purchases into 2013,” Medley told its clients in the Oct. 3 note.
Medley is owned by the Financial Times Group, a division of Pearson PLC, which competes with Bloomberg News.