Bloomberg BusinessWeek informs us:

A research paper has found “robust evidence” that for years some traders got early news of U.S. Federal Reserve rate announcements and then traded on it during the Fed’s media lockup.

The paper, covering September 1997 through June 2013, detected abnormally large price movements and imbalances in buy and sell orders that were “statistically significant and in the direction of the subsequent policy surprise.” The moves occurred during the window between when Fed announcements were supplied to the news media and when they were permitted to be released to the public, the authors write.

“Back-of-the-envelope calculations indicate that the aggregate dollar profits … range between $14 [million] and $256 million across the four markets that we examine,” the authors write.

In response, Federal Reserve spokesman Joe Pavel said that the Fed “enhanced its media release security procedures” last October “to better protect the information against premature release.” The Fed used to ring a cowbell to announce when news media could send out reports over open lines. Now it seals reporters off from the outside world during the “lockup” and flips a switch to open the communications circuit when the news embargo is lifted.

Tyler Durden at Zero Hedge supplies the graph that tells the story, compared to other announcements that were not leaked:

Hast tip: Clarice Feldman