After Fed members reveal million-dollar stock trades, Fed's Powell launches ethics investigation - Economy

Federal Reserve Chairman Jerome Powell has ordered his staff to launch an ethics investigation into the financial activities of Fed members as a number of senior central bank officials are questioned over their investments. Reports showed last week that Dallas Federal Reserve President Robert Kaplan profited from “multi-million dollar stock trades” in 2020.

Fed presidents profit from multi-million dollar stock trades

Federal Reserve members appear to be in disarray as politicians and the media have called out some Fed members for profiting from big stock trades. Bitcoin.com News has reported about critics looking directly at the members of the Fed and even Accusations Federal Reserve Chairman Jerome Powell is doing the same.

Last Tuesday, the Wall Street Journal (WSJ) published published an article Das revealed that Dallas Fed President Robert Kaplan “made several million-dollar stock trades in 2020, according to a financial disclosure form provided by his bank.” The New York Times also followed suit with one Article about Fed members and stock trading.

The media got wind of the investments after Democratic Senator Elizabeth Warren of Massachusetts sent letters to all of the Fed's regional bank presidents. Warren also published a Press release about the topic and disdained the “disturbing reports”.

“Following troubling reports that two regional Federal Reserve Bank (Fed) presidents made large equity trades in 2020 as the Fed took extraordinary measures to combat the COVID-19 pandemic,” Warren’s press release said.

“This controversy over asset trading by senior Fed officials demonstrates why it is necessary to prohibit the ownership and trading of individual stocks by senior officials designed to serve the public interest,” Warren said in a statement. “Regional Fed leaders must ban ownership and trading of individual stocks by senior officials and impose strict and enforceable ethical and financial conflict of interest rules for themselves and their employees to restore public trust.”

Now reports show that Jerome Powell is getting involved and Reports point out that the Fed chairman has ordered an ethics review. Speaking to CNBC, an unnamed Fed spokesman discussed the ethics investigation into the stock trading activities of senior officials.

The spokesman said Powell had ordered a "fresh and comprehensive look at the ethics rules governing 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 spokesman further said:

This review will help identify ways to further tighten these rules and standards. The Board will make changes as appropriate and any changes will be added to the Reserve Bank's Code of Conduct.

Too little too late

Well-known wallstreetonparade.com journalists Pam Martens and Russ Martens published an article That underscores the “recent outrage over” [the] Fed president’s stock trading is just the tip of the iceberg.

The Martens detail that Jerome Powell testified in Congress in 2020 and while Fed members knew that "every movement of money during the pandemic was made on behalf of the average American, the president of the Dallas Fed is making millions in bets on big tech stocks the Justice Department is investigating for antitrust activity."

In addition, the Martens also wrote that as two Fed presidents called They would sell their shares; it was “too little, too late”. The damning report on wallstreetonparade.com adds:

Fed presidents are privy to market-moving information that the general public is not. This was particularly true last year when the Fed took unprecedented action to combat the economic impact of the pandemic. The Fed cut the federal funds rate to zero, instituted a series of bailout programs for Wall Street, and began purchasing $120 billion a month in Treasury bonds and mortgage-backed securities.

What do you think about Jerome Powell launching an ethics investigation and the complaints that senior Fed officials are making millions from stock trades? Let us know your thoughts on this topic in the comments below.

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