Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Fed Chair Powell may need to sell millions in bonds under new rules

Published 10/21/2021, 05:43 PM
Updated 10/21/2021, 07:01 PM
© Reuters. FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on "The Semiannual Monetary Policy Report to the Congress" on Capitol Hill in Washington, U.S., July 15, 2021. REUTERS/Kevin

(Reuters) - Federal Reserve Chair Jerome Powell may need to sell as much as $3 million in bonds to comply with new rules issued by the U.S. central bank on Thursday, a review of his financial disclosures shows.

Powell appears to be the only Fed governor with holdings subject to divestment under the new policy, issued after a weeks-long review following revelations that some Fed policymakers had engaged in active securities trading last year even as the central bank was taking aggressive actions in financial markets.

In his government ethics filings for 2020, Powell reported total financial assets valued at as much as $98 million.

Among those were $1.25 million to $3 million in municipal bonds held by his family trusts.

Rules issued on Thursday prohibit Fed policymakers from owning such securities. Holders will be required to divest, a Fed official said.

No other Fed governors reported holdings that appear to be subject to mandated divestment.

Asked about his holdings at a news conference last month, Powell said that munis had always been "thought to be a pretty safe place for a Fed person to invest because as you know the lore was that the Fed would never buy municipal securities."

But after the pandemic hit the Fed began buying large swathes of the financial markets to keep from seizing up, including munis and corporate bonds.

© Reuters. FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on

It is unclear how long it will be before the new rules take effect.

(Corrects Powell's total reported assets to $98 mln)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.