(Reuters) -Two senior U.S. Federal Reserve staffers reported a series of financial market trades in early 2020 at a time when the central bank was putting in place emergency measures to prop up the economy at the onset of the COVID-19 pandemic, The Wall Street Journal reported https://on.wsj.com/33jP8rC on Friday.
John Stevens and Diana Hancock, both currently senior associate directors in the Fed's research and statistics division, reported in official financial disclosure forms a series of trades in February and March 2020.
Stevens reported 46 financial trades on Feb. 27 and Feb. 28, 2020, buying and selling individual company stocks, mutual funds and other investments.
The securities were part of a 2019 inheritance that was the sole property of Stevens' spouse Dominique Casimir-Stevens, she told Reuters after the newspaper published its report.
"I had a financial advisor rebalance those investments for me in order to bring them into compliance with the ethics rules. It is that rebalancing that resulted in the large number of transactions that my husband disclosed," she said.
"I am devastated that my dad's unexpected death and the actions we took to comply with the rules are now being used to tarnish my husband's good name and public service."
Hancock's disclosures included a sale of over $1 million in an exchange-traded fund, which holds shares in selected companies, on Feb. 27. Hancock told the newspaper her spouse made the trades, and she didn’t have any control over those transactions.
The disclosure forms do not distinguish between trades by staff and those of their spouses.
Fed Chair Jerome Powell, on Feb. 28, 2020, indicated the central bank would cut interest rates if needed, which it did in early March, the same month it launched a slew of programs to keep financial conditions loose and spur lending.
The Fed has come under scrutiny after disclosures of securities trading by Fed presidents and Fed governors during the pandemic. Unlike Fed staffers, Fed policymakers have access to the full range of policy-relevant deliberations and materials.
Powell has since announced new ethics rules governing financial holdings and dealings at the central bank and an investigation by the central bank's inspector general is underway.
Questions remain about how much back and forth may have occurred over policymakers’ personal trading in a year when markets first cratered, then rebounded on the basis of both massive federal fiscal stimulus and an aggressive rescue effort by the Fed.
Earlier this week, the Fed, responding to a Freedom of Information Act request by Reuters, said there are about 60 pages of correspondence https://www.reuters.com/business/finance/fed-denies-release-correspondence-pandemic-trades-made-by-policymakers-2022-02-09 between its ethics officials and policymakers regarding financial transactions conducted during 2020 but "denied in full" to release the documents, citing exemptions under the information act that it said applied in this case.