On March 19 and 20, the Federal Reserve had a meeting concerning the $85 billion dollar a month bond-buying program, which aimed to stimulate the housing market. With it showing positive signs of recovery, some officials debated about beginning to gradually phase out the initiative. The economy is performing better than usual, but the risk of increased taxation and more regulations could constrain growth and create uncertainty in the economy. Given the president's budget, which has almost $600 billion in tax increases, this isn't an illegitimate concern. Regardless, the minutes from that meeting were released earlier than expected Wednesday morning, and this has raised some eyebrows in Washington.
Jon Hilsenrath and Jeffrey Sparshott of the Wall Street Journal reported on April 10 that:
"The minutes were released early Wednesday because they were inadvertently sent a day early to Congress and some trade groups, the Fed said. 'The individuals on the distribution list — primarily congressional employees and employees of trade organizations — received the minutes shortly after 2 p.m. Tuesday.' They are normally released at 2 p.m., rather than 9 a.m., three weeks following Fed policy meetings."
Similarly, Jon Hilsenrath, Jeffrey Sparshott, and Victoria McGrane, also of the Wall Street Journal, wrote later in the afternoon that the email containing the minutes was due to a "snafu" by a career staffer — and the Fed's congressional liaison — Brain Gross. McGrane, Sparshott, and Hilsenrath noted that:
"Mr. Gross's involvement was confirmed by multiple individuals familiar with the email. Mr. Gross didn't immediately respond to a request for comment.
The Securities and Exchange Commission and the Commodity Futures Trading Commission were notified of the lapse, and the Fed has asked its own Inspector General's office to review the incident and the central bank's procedures for releasing information. After the mishap was discovered, the minutes were publicly released early at 9 a.m. New York time on Wednesday. The Fed minutes offer crucial insight into the central bank's thinking, information that can affect markets for stocks, bonds, and other financial products."
It's these mistakes that get the Ron Paul crowd fired up about the Fed's influence on our monetary and banking system. After all, in 2011, a GAO report articulated the unsurprising find that the Federal Reserve has a "cozy relationship" with top government officials — and that there was conflict of interest in the Fed concerning TARP's distribution of relief funds.
The report also detailed how that out "of 108 current board members, 82 are either president or chairman of their company, the GAO found. In the past five years, about 5% of directors represented labor or consumer interests." It's a point of contention for any person wary of vast concentrations of power, and rightfully so. As George Will aptly noted, as government expands, the more lawless it becomes. Yet, whether this was done with pernicious intent is still dubious. As of yesterday, the markets didn't react negatively or positively to this development.
Hilsenrath, Sparshott, and McGrane cited "Michael Feroli, chief U.S. economist at J.P. Morgan Chase, [who] said [that] he had heard no chatter in the markets about an early release of the minutes Tuesday. 'I didn't hear a squeak,' he said. He said congressional staff members are 'not that market-savvy,' one possible reason why chatter about the early release of the minutes didn't circulate more widely to traders."