World Economy

Fed Audit Raises Governance Concerns Over Information Sharing Practices

The Federal Reserve's internal watchdog has flagged control gaps surrounding the distribution of nonpublic confidential information to its 12 regional reserve bank boards, which comprise private-sector executives and financial industry leaders.

The watchdog determined the central bank requires stronger safeguards to restrict access to sensitive materials circulated among board members. This reflects concerns about information asymmetries that could benefit private interests alongside the Fed's need for regional business input.

Meanwhile, central banks globally grapple with competing pressures. Federal Reserve Bank of New York President John Williams noted inflation continues moderating as tariff effects ease and energy price gains remain contained. The Bank of Canada held rates steady but flagged escalating trade tensions and geopolitical conflict as emerging inflation risks. Denmark's central bank intervened to support its currency peg for the second time since June.