Rules for Thee, Not For Me?

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. 👀

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A “Pause” That Refreshes

Today’s big story was the Federal Reserve’s interest rate decision and projections, so let’s jump right into it. 👇

First, we’ll start with the market’s expectations. Coming into the decision, the bond market was pricing in a roughly 93% chance of a Fed “pause” today, with only 7% expecting another 25 bp hike. And…that’s exactly what we got. However, the devil is in the details. 🔍

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Soundbites From Several Fed Speakers

The Federal Reserve’s Chairman Jerome Powell delivered his testimony to Congress today, providing an outlook for the economy and banking system. Several other central bank members also spoke, creating a lot of headlines. 

Let’s look at some key soundbites so you don’t have to watch the full three-hour video. 👇

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What The Fed Did He Just Say?

Despite the market celebrating cooler-than-expected CPI and PPI prints this week, one Fed Governor remains thoroughly unimpressed by the progress. 😒

Federal Reserve Governor Christopher Waller said that U.S. central bankers “haven’t made much progress” despite embarking on one of the most aggressive rate tightening cycles in history. He noted that important measures and components of underlying inflation have “basically moved sideways with no apparent downward movement.”

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The Generative AI Push Continues

At the Alibaba Cloud Summit, the Chinese tech giant’s Alibaba Cloud unit revealed its ChatGPT-style product. 🤖

The product, called Tongyi Qianwen, will be available in Chinese and English. It’ll initially be rolled out via several existing products, including its workplace communication software (DingTalk) and its provider of smart home appliances (Tmall Genie).

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