Was The Fed Projection Release Really Accidental?

The Federal Reserve Board said in a statement on Friday that notes prepared as a background for last month's FOMC meeting were accidentally published on its website on June 29. Since the information was made public, the Fed decided not to take down the notes and instead make them more easily accessible on the central bank's site. http://www.benzinga.com/news/15/07/5702664/federal-reserve-update-on-leaked-staffer-economic-projections-exp-ffr-to-be-0-35- The projections indicate a 0.35 percent federal funds rate by year's end and 1.26 percent by the end of 2016. The rate would eventually level off at about 3.33 percent, according to an accompanying chart. The notes also anticipate that inflation will stabilize at 2 percent by 2025 after chaotic fluctuations since the financial crisis. Carter Mansbach, Founder and President of Jupiter Wealth Strategies, told Benzinga that he doubts that the numbers were released by accident. Mikhail Melnik, Associate Professor of Economics at Kennesaw State University, speculated that the leak could possibly be an attempt by the Fed to curb expectations of rate hikes this year. "They were certainly more dovish than expected," Mansbach said. Both Mansbach and Melnik offered several reasons as to why the Fed might be thinking twice about raising interest rates: weak Asian and Latin American markets, falling commodity prices, and a strong dollar, just to name a few. According to Mansbach, however, the market's reaction to the figures was more interesting than the figures themselves. Whereas over the past six years, he said, the market has tended to react positively to dovish Fed outlooks, the S&P 500 is down more than 20 points today. Loose monetary policy, in his view, simply hasn't helped the economy as much as people thought it would. Therefore, investors may now be viewing today's dovishness simply as a negative economic forecast.