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Fed's Powell: 'no one' happy with fellow policymakers' trading

EconomySep 22, 2021 06:10PM ET
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© Reuters. FILE PHOTO: Federal Reserve Chair Jerome Powell takes his seat to testify 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, 202

(Reuters) -U.S. Federal Reserve Chair Jerome Powell said on Wednesday he was displeased with the active investing carried out by two Fed regional bank presidents and pledged the central bank's ethics rules will be tightened after a thorough review.

"We need to make changes and we are going to do that," Powell said at a televised press conference after the Fed's latest policy meeting.

Though rules limiting the trading activities of Fed policymakers are somewhat stricter than those for government employees generally, the current framework is "now clearly seen as not adequate to the task of really sustaining the public’s trust."

Asked if he still trusted Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren to do their jobs, Powell said, "In terms of having confidence and that sort of thing, I think, no one is happy. No one on the (Federal Open Market Committee) is happy to have these questions raised."

His comments come amid criticism of the two officials and public calls for their resignation following revelations they traded actively in stocks and other investments last year, when millions of Americans lost their jobs and the Fed was taking historic steps to bolster financial markets and the economy.

Both Kaplan and Rosengren have said their ethics officers had signed off on their trading, but have since pledged to divest their holdings by the end of this month to avoid the appearance of a conflict of interest.

Their spokesmen declined to comment after Powell's remarks Wednesday.

Powell said he had not been aware of their trading activities before they were reported earlier this month by the Wall Street Journal and others.

Powell was also asked about his own holdings, which include municipal securities like those the Fed bought last year as part of efforts to stave off a financial market collapse. Powell said that he had owned them for years and was not an active trader.

"Munis were always 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," he said.

But then the crisis hit and the Fed began backstopping vast swaths of the financial markets. Powell said he checked with the office of government ethics which found he did not have a conflict.

Powell said he was "reluctant to get ahead of the process" and signal what changes might be ahead.

"When we have things to announce we will go ahead and do that," he said.

Fed's Powell: 'no one' happy with fellow policymakers' trading
 

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Comments (6)
peter neal
peter neal Sep 22, 2021 6:17PM ET
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Powell should be forced to out his money in a savings account and earn a quarter of a percent with 7 percent inflation. They are all dishonest and are paid and bought for. It's all a big scam and they know because they know we know it.
Oliver Closeoff
Oliver Closeoff Sep 22, 2021 5:35PM ET
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How is this not inside trading?
Ronald Warren
Ronald Warren Sep 22, 2021 5:35PM ET
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It is!!
Matthew Goff
Matthew Goff Sep 22, 2021 4:42PM ET
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The laws are already in place. Who wouldn't take advantage? Change laws and policies then be held responsible.
Matt Brackley
Matt Brackley Sep 22, 2021 3:58PM ET
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lol great excuse for them to sell. JPow king of manipulation
MK MK
MK MK Sep 22, 2021 3:57PM ET
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All those central banksters should be sentenced
Steven Kemp
Steven Kemp Sep 22, 2021 3:48PM ET
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he only addressed to make it look like they are going to do something but they know you will forget
 
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