Richmond Federal Reserve President Jeffrey Lacker's leak of sensitive information in 2012 could have come about as a consequence of a "mind lapse", according to one of his former colleagues.
Former Atlanta Federal Reserve President Dennis Lockhart told CNBC Wednesday that the incident was "regrettable". Lacker tendered his resignation on Tuesday after admitting he had discussed sensitive information about Fed policy options with a Wall Street analyst in 2012.
"I don't know the details but it could very well be inadvertent. It could be something that is sort of a mind lapse at a moment that you are not thinking," Lockhart told CNBC when asked to comment on Lacker's resignation.
"It was a few days before the minutes were to come out and so the leak as I recall… the leak involved disclosing information in advance of the minutes which of course is a
In Lacker's letter of resignation, he admitted to speaking to an analyst at Medley Global Advisors regarding the September 2012 Fed meeting. Medley publishes analysis for hedge funds and asset managers and is owned by the Financial Times.
Lacker said he had "crossed the line" when discussing sensitive information with a Medley analyst and that his actions violated Fed communications policies which prohibited "providing any profit-making person or
The former Richmond Fed President had been known as one of the most reliable proponents for U.S. interest rate hikes during his tenure.
Mixed messages for investors
Lockhart also appeared to express sympathy with investors who had found it tough to predict the Fed's direction for monetary policy.
"The presidents have a great deal of independence in saying whatever they want (and) that creates, of course, conflicting views out there and
San Francisco Fed President John Williams said on March 29 he would not be able to rule out more than three rate increases in 2017. Whereas, that same day Boston Federal Reserve President Eric Rosengren suggested if he gets his way, the central bank would raise four times by year-end. Meanwhile on Monday, Philadelphia Fed President Patrick Harker said the Fed should plan to hike two more times this year to avoid rushing its tightening plans, according to Reuters.
Market expectations are currently for two more rate hikes in 2017, as the Fed has forecast. The central bank raised rates a notch in March, after its hike last December.
— Jeff Cox contributed to this report