RICHMOND FED BOSS RESIGNS OVER LEAK
Jeffrey Lacker expresses ‘ deep regret’ over 2012 interview in which he may have shared confidential information
“I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse ... and the interview continued.” Jeffrey Lacker
Richmond Federal Reserve Bank President Jeffrey Lacker resigned Tuesday, acknowledging he may have helped provide confidential information about a Fed economic stimulus program to a research firm in October 2012.
The alleged leak to Medley Global Advisors — which provides reports and market intelligence to hedge funds and asset managers — has been the subject of long- standing investigations by the Justice Department, federal regulators and a House committee.
“I deeply regret the role I may have played in confirming this confidential information and in its dissemination to Medley subscribers,” Lacker said in a statement.
Lacker’s lawyer, Richard Cullen, said in a statement: “We have been told that the investigations are over and that there will be no charges against Dr. Lacker.”
The Federal Reserve System carries out the nation’s monetary policy by setting interest
rates, and it takes other steps to stimulate the economy and control inflation. The system includes the Fed’s board of governors and staff in Washington, D. C., and 12 regional banks, including Richmond.
Lacker has headed the Richmond Fed since 2004 and had planned to retire in October. He’s a member of the Fed’s policymaking committee, which makes decisions about whether to raise or lower the central bank’s benchmark interest rate, affecting rates across the economy. This year, he has participated in committee meetings but is not a voting member.
The episode centers on a Sept. 12- 13, 2012, meeting at which Fed policymakers agreed to buy $ 40 billion in mortgagebacked securities to push down long- term interest rates and stimulate the economy. At the time, economic growth was sluggish and job gains had slowed dramatically. Lacker was a nonvoting member of the Fed’s policymaking committee.
On Oct. 3, a Medley analyst wrote a note to clients that said the Fed was poised to vote at its December meeting to start buying another $ 45 billion in Treasury bonds to further juice growth. The analyst also wrote that Fed officials discussed adding to its December statement an assurance not to raise interest rates until unemployment and inflation hit certain targets.
Those Fed moves, in fact, did occur in December, and Medley’s information appeared to have come from Fed officials with knowledge of the September meeting.
In his statement Tuesday, Lacker said that on Oct. 2 he spoke to a Medley analyst who had “an important non- public detail” about a Fed policy option. “Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued.”