NEW YORK (CNNfn) -- At a recent Federal Reserve Board photo opportunity, there were no loose lips about interest rates. "Mum" was the word about a Reuters report that rocked bond markets Tuesday.
Citing extraordinarily detailed information about the desire by the Fed's regional banks to raise interest rates by a quarter point or more, the report shocked veteran Fed watchers. Fed Vice Chairman Alice Rivlin called the leak "very distressing."
"There is no question in my mind that if someone is discovered as having done it -- or someone confesses to having done it -- that their career at the Federal Reserve is terminated, said Wayne Angell, a former Fed governor who is now chief economist at Bear Stearns.
"This is the highest kind of violation that a member of a central bank staff or board could ever have," he added.
Angell said he had no doubt that the information was accurate, noting that he has no guesses which senior Federal Reserve official released the information.
Another former Fed official discounted the possibility that the leak was a deliberate pre-election effort to avoid surprising the market with a rate increase next week.
"They are very, very careful at the Fed about communications failures to make sure there are no inadvertent leaks," said Scott Pardee, senior advisor at Yamaichi Capital. "This was probably a human error."
Although a Fed regional bank director was once criminally prosecuted for a leak, a Justice Department spokesman said he knows of no criminal violation in the new case. Others say the Fed's inspector general is sure to investigate further.