Federal Reserve Chairman Jerome Powell has ordered an ethics review of rules after reports emerged that Powell and other Fed Presidents owned assets that the Fed purchased throughout the COVID pandemic. All three of the Fed members bought the assets well before the pandemic. 📈
Though these Fed members didn’t “insider trade”, some argue that they benefited from the institution buying assets they held. The report has rekindled a discussion regarding to what extent public officials should have autonomy with regards to holding, buying, or selling assets while in office.
The discourse comes with another catalyst: an ongoing congressional insider trading scandal. It’s not exactly private knowledge that a number of congressmen sold holdings before COVID. Then some did what every great, well-to-do investor does after the entire market crashes: they bought the dip! Many complaints have stacked up against congressmen. Despite this, no prominent public servant has recently been charged with insider trading.
What the named Fed members did is not nearly as provocative and clear-cut as what various Congressional leaders are said to have done. However, it highlights important concerns about conflicts of interest in government and markets. We’ll be watching to see the conclusion of the Fed’s own audit. 👀