(The American Prospect) Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million worth of stock from his personal account on October 1, 2020, according to disclosure forms reviewed by the Prospect.
Powell’s sale of shares from a Vanguard Total Stock Market Index Fund has not been previously reported. This sale occurred right before the Dow Jones Industrial Average suffered a significant drop.
A Fed media relations spokesperson was not available for comment. We will report on any Fed statement on Powell’s trades.
Three other senior Fed officials have faced serious criticism for making stock trades during the pandemic. Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren were compelled to take early retirements as a result of the disclosure of their trades. Fed Vice Chair Richard Clarida also came under fire for stock trading.
The other trades are now the subject of investigations by the Fed’s own inspector general and the SEC.
There is no American with more insider knowledge about government policy that drives financial market movements than the chair of the Federal Reserve. And as COVID caseloads, hospitalizations, and deaths spiked last fall, the economy was in a precarious condition. October turned out to be the stock market’s worst month since March 2020, when the pandemic began.
Under current laws, top Fed officials do not have to put their assets into a blind trust over which they have no control, despite their knowledge of the inner workings of the economy.
The Fed’s code of conduct for senior officials holds that “personal financial dealings should be above reproach, and information obtained by them as officials of the System should never be used for personal gain.”