The Federal Reserve chairman Jerome Powell has directed his staff to start an ethics inquiry into the financial activities of Fed members, as a number of senior central bank officials are being questioned for their investments. Reports indicated last week that the president of the Dallas Federal Reserve branch, Robert Kaplan, benefitted from “multiple million-dollar-plus stock trades” in 2020.
Fed Presidents Profit From Multiple Million-Dollar Stock Deals
Members of the Federal Reserve seem to have a mess to deal with as politicians and the media have called out a few members of the Fed for benefitting from major stock deals. Bitcoin.com News has reported on critics looking directly at the Fed’s members and even accusations of Federal Reserve chairman Jerome Powell doing the same thing.
Last Tuesday, the Wall Street Journal (WSJ) published an article that revealed Dallas Fed president Robert Kaplan “made multiple million-dollar-plus stock trades in 2020, according to a financial disclosure form provided by his bank.” The New York Times followed as well with an article about Fed members and stock trading.
The media caught wind of the investments after Democrat senator Elizabeth Warren from Massachusetts sent letters to all of the Fed’s regional bank presidents. Warren also published a press release about the subject and scorns the “troubling reports.”
“Following troubling reports that two regional Federal Reserve Bank (Fed) Presidents made extensive stock trades in 2020 as the Fed took extraordinary actions to address the COVID-19 pandemic,” Warren’s press statement notes.
“This controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest,” Warren further declared in a statement. “Regional Fed leaders must ban the ownership and trading of individual stocks by senior officials, and impose strong and enforceable ethics and financial conflicts of interest rules for themselves and their staff to restore public trust.”
Now reports show Jerome Powell is getting involved and reports indicate the Fed chairman has ordered an ethics review. Discussing the subject with CNBC, an unnamed Fed spokesperson discussed the ethics inquiry into the stock trading activities conducted by senior officials.
The spokesperson said Powell has ordered a “fresh and comprehensive look at the ethics rules around permissible financial holdings and activities by senior Fed officials. Because the trust of the American people is essential for the Federal Reserve to effectively carry out our important mission.” The spokesperson further said:
This review will assist in identifying ways to further tighten those rules and standards. The Board will make changes, as appropriate, and any changes will be added to the Reserve Bank Code of Conduct.
Too Little, Too Late
Meanwhile, the well known wallstreetonparade.com journalists Pam Martens and Russ Martens published an article that highlights the “latest outrage over [the] Fed presidents’ trading stocks is just the tip of the iceberg.
The Martens detail that while Jerome Powell testified in Congress in 2020, and while Fed members knew “its every monetary move during the pandemic was on behalf of the average American, the Dallas Fed President is making million-dollar bets on big tech stocks the Justice Department is investigating for anti-trust activity.”
Moreover, the Martens also wrote that when two Fed presidents said they would sell their stocks, it was “too little, too late.” The scathing report on wallstreetonparade.com adds:
Fed Presidents are privy to market-moving information that the general public is not privy to. That was especially true last year as the Fed took unprecedented measures to combat the economic impact of the pandemic. The Fed slashed the Fed Funds rate to zero, established a panoply of bailout programs for Wall Street, and began buying up $120 billion a month in Treasuries and mortgage-backed securities.
What do you think about Jerome Powell starting an ethics inquiry and the complaints aimed at the Fed’s senior officials making millions from stock trades? Let us know what you think about this subject in the comments section below.