Lacker Leaks and Model Errors

The Lacker leak.

Yesterday Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, resigned after admitting that he was partly responsible for a 2012 leak. One way to tell this story is that a reporter got a tip that the Fed was going to vote in December on monthly purchases of $45 billion of Treasuries, and used a clever reporting trick to confirm her tip with Lacker: She called him up and, instead of asking him "hey is the Fed going to buy Treasuries in December," said something more like "so the Fed is going to buy Treasuries in December, huh; anyway I hear you're having some nice weather down there," and he said "yes we sure are having nice weather," and she knew that his lack of reaction to her tip meant that it was true. So she published it. And then he read her article and saw what had happened: "I realized that my failure to decline comment on the information could have been taken," he said in his resignation statement, "as an acknowledgment or confirmation." But at that point, what are you going to do?