CNBC scrutinized officials’ financial information in protest that the Federal Reserve owns and trades individual securities, and the Fed itself bought it last year, including Chairman Jerome Powell. We found three people who had the same type of assets as.
None of these holdings or transactions appeared to violate the Fed’s Code of Conduct. But they are further questioning the Fed’s conflict of interest policy and the oversight of central bank officials.
- Powell holds $ 1.25 million to $ 2.5 million in municipal bonds in a family trust and is said to be unable to manage them. They were only a small part of his reported total wealth. Bonds were purchased before 2019, but were held when the Federal Reserve Board purchased $ 21.3 billion of Muni in 2016, including bonds from Illinois purchased through a family trust. From Illinois.
- Federal Reserve Bank of Boston Governor Eric Rosengren held $ 151,000 to $ 800,000 worth of real estate investment trusts holding mortgage-backed securities. He made 37 individual transactions on four REITs, and the Fed bought about $ 700 billion in MBS.
- Richmond Fed President Thomas Barkin held $ 1.35 million to $ 3 million in individual corporate bonds purchased before 2020. This includes Pepsi, Home Depot and Eli Lily bonds. Last year, the Federal Reserve Board opened a corporate bond purchase facility to buy $ 46.5 billion in corporate bonds.
Among those questions: The Fed told authorities to own, buy, and sell the same assets that the Fed itself bought last year when it dramatically expanded the types of assets it bought in response to a pandemic. Should it be banned?
The Federal Reserve Board’s own code of conduct avoids transactions or other actions that could convey that officials “may even appear to be a conflict between the interests of individuals, the interests of the system, and the interests of the public.” You need to be careful. “
In response to CNBC’s questions asked during the course of our investigation, a Fed spokesman issued a statement Thursday. Powell said last week he ordered a review of the Fed’s ethical rules. Surrounding “allowable financial holdings and activities by Fed officials”.
A Fed spokesperson told CNBC that Powell had no say in the purchase of individual Fed bonds or in investing in family trusts. Federal Reserve ethics officials have determined that the holdings do not violate government rules.
Birkin declined to comment.
Rosengren announced that he would sell his individual positions and stop trading while he was president. Dallas Fed President Robert Kaplan, who aggressively traded millions of dollars in individual stocks, also said he would no longer trade and sell individual positions. But he said his trade did not violate federal ethical rules.
A Rosengren spokesman told CNBC, “We have confirmed that his personal savings and investment transactions comply with those permitted under federal ethical rules.”
But Dennis Kelleher, CEO of the non-profit Better Market, said the rules need to be changed if some of these Fed actions do not violate the rules.
“Thinking that such a deal would be accepted, as it seems to be permitted by the Fed’s current policy, only emphasizes that the Fed’s policy is terribly inadequate,” Kelleher told CNBC. Told.
Trade between Rosengren and Kaplan did not take place during the so-called blackout period, but when Fed officials were not allowed to speak publicly about monetary policy and trade, Kelleher was in a crisis like last year. Said to. That’s because Fed officials are constantly discussing and formulating policies in response to fast-moving events.
The Federal Reserve Board owned the same type of assets that banks bought during Covid.
Source link The Federal Reserve Board owned the same type of assets that banks bought during Covid.