“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.”
How did this happen? Right now, we don’t know. But , where computer algorithms fed by data make trades based on pre-programmed strategies, the difference between trading at seven milliseconds after the news and two milliseconds after the news can be worth millions.
The Federal Reserve is concerned, and it’s in the process of questioning news organizations, since reporters get the Fed release early. But, they get the information in a secure room and aren’t allowed to communicate with the outside world until 2 p.m. on the dot. When CNBC asked whether any organizations possibly broke the Fed’s rules, the Fed spokesman didn’t respond on the record.
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