Yellen Says Justice Department Investigating Fed Leak

Pay attention to this.

Federal Reserve Chair Janet Yellen said the U.S. Department of Justice has joined an investigation into a leak of confidential monetary-policy information in 2012, reports Bloomberg.

“The Board’s Inspector General and the Department of Justice are in the midst of an investigation into this matter,” Yellen said in a letter to Representative Jeb Hensarling, chairman of the House Financial Service Committee, dated Monday in Washington.

“We are cooperating fully with them and look forward to the results of their investigation,” she said.
Her letter comes amid increasing congressional pressure on the Fed to say more about how it conducts

Here's how Bloomberg in 2014 reported on the leak:

Alarms went off inside the Federal Reserve: the Fed’s innermost secrets had leaked to Wall Street.

Confidential deliberations of the Federal Open Market Committee made their way into a research note circulated among traders.

The report -- a fly-on-the-wall account of the FOMC’s September 2012 meeting, with hints of Fed action to come that December -- prompted a mole hunt that reached the highest levels of the central bank.

The story of the FOMC leak underscores the lengths to which outsiders will go to penetrate the inner workings of the Fed, and how valuable access can be. The Fed has never disclosed the investigation or its findings...

The 2012 report on the FOMC came from Medley Global Advisors, a member of Washington’s policy intelligence community...

Medley issued its FOMC report on Oct. 3, 2012, one day before the Fed released its minutes. People who received the Medley report could have positioned to profit from a decline in U.S. Treasury security prices that followed the Fed’s official release...

The Oct. 3 report was written by Regina Schleiger, a former financial journalist who is now a senior managing director at Medley...

The September meeting was a half step toward what would become one of the most aggressive moves in U.S. monetary history. The world got a hint of what was coming that December when the FOMC minutes were released on Oct. 4.

Medley clients got an early peek...Schleiger’s “special report,” titled “Fed: December Bound,” was so detailed that it alarmed Fed officials...

Here'e where things get interesting. Yellen now admits that she met with Medley some time before the leak. Bloomberg today:

Yellen also said that in June 2012 she met with an analyst from Medley Global Advisors, which published a report on deliberations of a September 2012 closed-door meeting of the Federal Open Market Committee, one day before minutes of the meeting were made public.

The Fed chair said she met with Medley analyst Regina Schleiger on June 11, 2012, “to hear her perspectives on international developments.”

In addition, the Fed chief noted that she could not have known about the September events reported in the Medley letter and added that she “did not convey any confidential information.”

Yellen said Fed is compiling a list of other Fed members who were in contact with Medely, if any, in the period before the leak and that she would provide the names to the Committee.

For the record, if Yellen is for some reason forced to leave because of the investigation, Fed vice-chairman Stanley Fischer most certainly would be come acting-Chairman.

It is widely believed that Fischer is only vice-chairman, instead of chairman, becasue he was head of the central bank of Israel, which would make it difficult for him to gain the votes necessary for Senate confirmation as chairman. Fischer is the choice of the banksters. A Yellen resignation would result in a backdoor way by which a bankster made-man ends up at the top of the Fed.

RW