4 years ago
robertr
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Some Traders Got Tipped off to Fed News
In the wake of an unusual trading pattern after the Federal Reserve's decision to continue economic stimulus last week, Fed officials have contacted certain news organizations to discuss rules and procedures for the central bank's advance release of sensitive information, CNBC has learned. On Sept. 18, the Federal Reserve shocked the financial world with its decision not to scale back its level of support to the economy as most market participants expected. Financial markets reacted at the speed of light, pushing stocks dramatically higher in just moments. But it looks like the speed of light just wasn't fast enough for some traders. Some traders in Chicago appear to have had access to the Fed's decision before anyone else in the Windy City. According to trading data reviewed by CNBC, they began buying in Chicago-traded assets just before others in that city could possibly have been aware of the Fed's decision. By one estimate, as much as $600 million in assets changed hands in the milliseconds before most other traders in Chicago could learn of the Fed's September surprise—a sharp contrast to the very low volume of trading ahead of the Fed's decision.
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