The Austrian School of Economics would be quick to note that central planners create a condition in the marketplace, a moment where some “know” and some “don’t know” of a central planning decision.  It is one of the great dangers of central planning, and also one of continual largess for others. 

The Federal Reserve, that body that is not federal, nor does it have reserves, is such a central planner.  Its official releases via Federal Open Market Committee minutes of actions and attitudes of the Fed with the random comments by the governors of the Fed are market-moving events.  Billions if not trillions change hands on this information, these “insights.”

Rand and Ron Paul have championed the “audit the Fed” movement, and have gained support from both sides of the aisle.  But what has become crystal-clear of late is how powerless Congress is in its attempted dealings with the Federal Reserve.  With the notion that we are on the verge of negative interest rates, a situation in which depositors pay the banks for holding deposits, and realizing that the Fed is essentially operated by bankers, raises red flags.  But a less complicated matter, one challenging the integrity of the Fed and its control over sensitive information, sensitive by its own design, is on the table for all to see.

At issue is the Fed's review of an October 2012 financial advisory report by Medley Global Advisors, a policy intelligence service, issued to its clients with potentially market-moving information about central bank policy discussions and decisions – a leak, if you will, from the Fed to certain people, people who make lots of money when advised prior to others.

Bernanke, April 2013:

The Federal Reserve said Wednesday it launched an investigation into the U.S. central bank's worst security lapse in years, but it said it appeared the early release of market-sensitive minutes of a policy meeting, including to some banks, was accidental.

In addition, in December 2014

Minutes of the FOMC, the 12-member panel that sets monetary policy, are so sensitive that an accidental leak in April 2013 caused a stir. The Fed inspector general was asked to examine how the Board of Governors handled confidential information and released a report to the public detailing weaknesses.

More recently, the question of Fed leaks has focused on the Federal Reserve Bank of New York, where an employee passed confidential information to a banker at Goldman Sachs Group Inc. That episode raised concern about ties between government agencies and the financial industry.

Update, Dec. 1, 5:55 p.m.: The Federal Reserve Board declined to respond to detailed questions about this article. The Inspector General also declined to comment. Former Fed Chairman Ben Bernanke referred all questions to the Federal Reserve. Medley Global Advisors did not respond to requests for comment.

The Federal Reserve sprung a previously unreported leak in October 2012, when potentially market-moving information about highly confidential monetary deliberations made its way into a financial analyst's private newsletter.

The leak occurred the day before the scheduled public release of meeting minutes that shed new light on the Fed's decision to embark on a third round of bond buying to boost the economy.”

March 2015: “Janet Yellen denies Fed officials stopped leak investigation”:

According to information we have obtained, the Federal Reserve's general counsel was initially involved in the investigation, but the inquiry was dropped at the request of several members of the FOMC," a Hensarling spokesperson said in an email to CNN Wednesday, but did not elaborate further on what information the committee had received or provide the names of the FOMC members.

July 2015:

Federal Reserve Chair Janet Yellen is pressed by Rep. Sean Duffy (R-WI) to turn over documents on an investigation into a 2012 leak of confidential monetary policy deliberations.

If any one is trying to sweep this under the rug it is the Fed.

And now to last week, February 10, 2016.

Rep. Sean Duffy (R., Wis.), chairman of the House Financial Services oversight subcommittee, said the panel had asked for excerpts of transcripts of meetings of the Federal Open Market Committee relating to the disclosure of deliberations that occurred at the FOMC'sSeptember 2012 meeting.

"This is not market-moving stuff," he countered.  "This is about the investigation and a conversation of a leak inside of your organization. This institution is entitled to those documents – would you agree?" Mr. Duffy said.

"I will get back to you with a formal answer," Ms. Yellen said.

That would be coming up on four years, Madam Chairwoman.  Public servant or private servant?  Time to audit the Fed.