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“Reports of this financial activity by Fed officials raise serious questions about possible conflicts of interest and reveal a contempt for public confidence,” Warren wrote. “They also reflect the atrocious judgment of these officials and an attitude that personal profit is more important than the confidence of the American people in the Fed.”
“Finally, and especially from the SEC’s point of view, if these transactions were based on the knowledge by Fed officials of non-public information about market movements, they could have represented potentially illegal activity,” a- she added.
Powell has pledged to tighten central bank ethics rules and told lawmakers last week that the central bank was reviewing whether the business activity of some Fed officials was “within the law.”
The most recent trade news from Clarida, previously reported by Bloomberg, adds a new wrinkle. Due to the quasi-private structure of the Fed’s regional banks, their chairmen are not required to disclose their financial transactions to the Office of Government Ethics, unlike Powell, Clarida and other members of the Board of Directors of the Fed. Washington-based Fed.
A Fed spokesperson said that Clarida’s 2020 transactions “represent a planned rebalancing of her accounts” that were “executed prior to her involvement in deliberations over Federal Reserve actions to respond to the emergence of the coronavirus. and not during a blackout period “.
“The selected funds were chosen with the prior approval of the ethics executive of the board of directors,” the spokesperson said, adding that Clarida’s financial disclosure was released in mid-May.
The outcry comes at a politically inappropriate time for Powell, as he awaits a decision on whether President Joe Biden will reappoint him for another term. Warren said last week she would oppose his re-appointment.
“It is not known why President Powell has not stopped these activities, which eat away at the confidence and effectiveness of the Fed,” she said in a letter Monday.
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