Embargoed news stories

The Fed announced today at 2:15pm they would not drop interest rates, mentioned little about the mortgage debacle, and said fighting inflation was primary.

As an active options trader, I was watching Bloomberg for the announcement in one window and the real-time Dow Jones average in another. At precisely 2:15pm Bloomberg released a detailed story and the Dow dropped sharply.

Thus, the Bloomberg story had to have been written ahead of time with reporters having advance notice of the Fed decision. So, I wonder, how do they isolate reporters and embargo the story until the release time? Knowing in advance of a closely-watched Fed decision like this one could quite literally make you huge amounts of money in just a few minutes.

4 Responses to Embargoed news stories

  1. DJ Tue, Aug 07, 2007 at 6:53 pm #

    Much as I’d love to buy into a conspiracy theory, my own writing experience suggests it’s not the case. It’s not at all unusual to write an article based on what you expect to happen.

    I would think any experienced fed-watcher could generally write the story in advance of the announcement. Especially with Bernanke: he’s not rocking any boats. Everyone expected the Fed to hold steady this time, so that was pretty much a no-brainer.

  2. Bob Morris Tue, Aug 07, 2007 at 10:26 pm #

    The Bloomberg article quoted extensively from the Fed statement, there’s no way it could have been written and published at 2:15 when the official release was also at 2:15. So they must have released an embargoed version.

  3. Wood Wed, Aug 08, 2007 at 9:39 am #

    In my own experience, it’s not actually really a conspiracy. Agencies get given press releases in advance; the items are embargoed until the time specified. It’s not just people like the FBI, too. I get stuff from people like CAAT and the like, and sometimes it’s embargoed. it;s not sinsiter. It’s just standard practice.

  4. Bob Morris Wed, Aug 08, 2007 at 1:48 pm #

    I just wonder how they enforce the embargo. If reporter Bob reads the embargoed Fed release, texts his girlfriend a one-letter prearranged message, and she shorts the market, well, they could make a bundle.

    Doubtless the Fed has already thought of this and there are severe penalties for breaking the embargo.