Yesterday The New York Post reported the following:
Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million in stocks at the beginning of October 2020 — a month that turned out to be the worst for Wall Street since the beginning of the COVID-19 pandemic.
The transaction, which is noted on a public disclosure form Powell signed off on in May and was first reported Monday by The American Prospect, is an uncomfortable echo of activities that led to the recent resignations of two regional leaders of America’s central bank.
The disclosure form indicates that Powell sold the Vanguard Total Stock Market Index Fund shares on Oct. 1, 2020. Ten days earlier, a separate sale of shares from the same fund netted the Fed chair between $50,000 and $100,000.
As Powell played the market, he was calling on Congress to pass a second COVID-19 relief bill even as negotiations between lawmakers and the Trump administration were in a stalemate. The American Prospect, citing Powell’s public schedule, reported that he had spoken with then-Treasury Secretary Steven Mnuchin four times on Oct. 1, as well as with House Speaker Nancy Pelosi (D-Calif.).
The article concludes:
Separately, Bloomberg News reported on Oct. 1 of this year that Federal Reserve Vice Chairman Richard Clarida had moved between $1 million and $5 million out of one mutual fund and into two other funds on Feb. 27, 2020, the day before Powell signaled a potential interest rate cut due to the pandemic.
The disclosures have drawn the ire of Sen. Elizabeth Warren (D-Mass.), who wrote to the head of the Securities and Exchange Commission (SEC) earlier this month to ask for an investigation into whether Rosengren, Kaplan or Clerida had violated insider trading rules. In a Senate floor speech Oct. 5, Warren called out Powell and said he had “failed as a leader.”
However, other lawmakers have lined up behind Powell as President Biden nears a decision about whether to nominate him for a second four-year term that would begin in February. Fox Business Network reported Monday that at least eight Republican senators have said they would vote to confirm Powell for a second term.
The Federal Reserve did not respond to requests for comment about Powell’s transactions.
Mr. Powell’s biography notes that he is a lawyer who has worked in the investment banking field. I suppose this would give him the knowledge to make the kind of stock trade he made at the time he made it. However, I do think we need to take a really good look at the financial transactions of those in government. It seems as if there are a lot of people in government who seem to have an uncanny knack for buying and selling stock and stock options at exactly the right time.