While a number of Federal Reserve chairmen have come under fire for their stock moves in 2020, Fed Chairman Jerome Powell has come under the spotlight for owning $ 1.5 million in bonds. municipal governments like the ones the US central bank bought in 2020 during the pandemic.
All eyes are on Jerome Powell’s municipal bond portfolio
Three days ago, the topic of senior Federal Reserve members closing multi-million dollar stock deals in 2020 prompted Senator Elizabeth Warren to write a letter criticizing the bank member’s ethics, and the President Jerome Powell has said he will open an ethics investigation. However, shortly after the media grilled U.S. central bankers for their behavior, reports revealed that the Federal Reserve chairman owned a few types of municipal bonds, similar to the ones the Fed bailed out during the crisis. coronavirus.
It is also not the first time that Jerome Powell’s wallet has been the subject of a public inquisition. Wallstreetonparade.com reporters Pam Martens and Russ Martens wrote about it and Northman Trader’s Sven Henrich tweeted about it in June. The Martens article at the time stated that Powell had “more than $ 11.6 million invested with Blackrock, the company that will run a $ 750 billion corporate bond bailout program for the Fed.”
FYI: One person who benefits financially from every stock market rally is Jay Powell, who owns tens of millions of ETFs, including $ SPY, $ RUT & holdings with Blackrock the same company he selected to buy the ETF from the Fed https://t.co/7yvWsCs6lZ
– Sven Henrich (@NorthmanTrader) June 12, 2020
On September 18, CNBC reported on the matter and noted that Powell’s financial measures did not appear to violate the central bank’s code of conduct. CNBC Steve Liesman said the Fed’s code of conduct states that officials “should be careful to avoid any transaction or other conduct that could give even the appearance of conflict between their personal interests, the interests of the system and the public interest.”
Additionally, Liesman said that “Powell held between $ 1.25 and $ 2.5 million in municipal bonds in family trusts,” which was “only a small portion” of Powell’s total assets. “While the bonds were bought before 2019, they were held while the Fed last year bought more than $ 5 billion in munis, including one from the state of Illinois purchased by its family trust in 2016, ”Liesman added.
Better Markets Executive: “Fed policies are woefully flawed – the whole year should be seen as a blackout”
Powell has seen a barrage of negative press lately, and on September 1, Bitcoin.com News reported how U.S. lawmakers Alexandria Ocasio-Cortez (AOC), Rashida Tlaib, and Ayanna Pressley want a new central bank. A president who will help “mitigate the risk [of] climate change, ”AOC said in a recent statement. Despite the push from Democratic representatives, sources with ties to Washington believe Joe Biden will re-appoint Jerome Powell to lead the Fed.
Meanwhile, Dennis Kelleher, CEO of a nonprofit called Better Markets, told Liesman that the decisions of senior Fed officials were not in good taste. “To think that such trade is acceptable because it is supposedly allowed by current Fed policies only underscores that Fed policies are woefully flawed,” Kelleher said. When Kelleher was told that Fed officials could trade the stocks because it was not a blackout period, the CEO of a nonprofit remarked:
The entire year should be considered a blackout period.
What do you think of Fed Chairman Jerome Powell joining Richmond Fed Chairman Thomas Barkin and Boston Fed Chairman Eric Rosengren in the controversy? Let us know what you think of this topic in the comments section below.
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