Fed’s Powell says changes needed in rules for officials’ investing


FILE PHOTO: Federal Reserve Chair Jerome Powell takes his seat to testify before a Senate Banking, Housing and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress” on Capitol Hill in Washington, U.S., July 15, 2021. REUTERS/Kevin Lamarque/File Photo

September 22, 2021

(Reuters) -U.S. Federal Reserve Chair Jerome Powell said on Wednesday he was displeased with the active investing carried out by two Federal Reserve regional bank presidents and pledged the central bank’s ethics rules will be tightened.

Asked if he still trusted Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren could carry out their jobs, Powell said at a televised press conference, “in terms of having confidence…no one is happy. No one on the (Federal Open Market Committee) is happy to have these questions raised.”

His comments come amid public criticism of the two officials and calls for their resignation following revelations they traded actively in stocks and other investments during the pandemic years when millions of Americans lost their jobs and the Fed was taking historic steps to bolster financial markets and the economy.

He pledged that a review he has launched of Fed ethics rules would lead to changes.

The existing rules covering central bank officials’ investment activities are “now seen as clearly not adequate” and changes are needed.

Powell, answering a question after the Fed’s latest policy meeting, also said he had not been aware of the trading activities of Kaplan and Rosengren that has drawn criticism from Fed watchers.

(Reporting By Dan Burns; Editing by Chris Reese and Andrea Ricci)

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