With the possible exception of Vice Chairman Richard Clarida, everyone seems to agree that something must be done about Federal Reserve officials’ personal stock-trading. Chairman Jay Powell and Sen. Elizabeth Warren don’t see eye-to-eye on much—most particularly on whether Powell should remain chairman of the central bank after his term expires in February—but both agree that the scandal that has already taken down two regional Fed presidents should not be permitted to happen again. It’s just that they have different senses of urgency on the matter.
The senator had asked for a response by Oct. 15 on plans for a trading ban, followed by its implementation within 60 days of her letters….. St. Louis Fed President James Bullard wrote to Ms. Warren on Sept. 20 on behalf of all the regional Fed bank leaders, saying that a broader central bank review of its internal ethics code, announced the same day as Ms. Warren’s letters, would drive any changes the Fed makes.
What’s taking so long? Well, uh, Powell may have had a few other things to square away before implementing any kind of restriction.
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.
That’s not a great look, and it doesn’t get any better the more you learn about it.
Meeting logs show that Powell had been in contact with Treasury Secretary Steven Mnuchin four times on October 1. Powell had been pressing the administration to support more fiscal stimulus, so that the sole responsibility for rescuing the economy would not be on the Fed and monetary policy…. That same day, at 2:48 p.m., after conferring with Mnuchin, Trump tweeted that he had instructed his representatives to halt negotiations with Democrats on a pandemic stimulus package until after the election: “Immediately after I win, we will pass a major stimulus bill.”
All of a sudden, the seemingly growing likelihood that Powell would get four more years seems somewhat fainter possibility, regardless of the position of his predecessor. Indeed, it’s looking so bad that Senate Republicans are offering that rarest of things: A helping hand to President Joe Biden.
GOP senators, in part driven by concern that a Powell replacement would be more liberal, are making it clear they will help put up the voters to confirm him to a second term…. “The reason I would support him — it isn’t because I agree with the way he’s handled the inflation issue,” [Sen. Charles] Grassley said, “but the alternative would be much worse.”
Maybe Biden should offer a Powell renomination in exchange for a permanent suspension of the debt ceiling.
Treasury Secretary Janet Yellen on Monday said the debt-limit deal enacted by Congress last week will allow the government to keep paying its bills through Dec. 3…. “It is imperative that Congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the government will satisfy all its obligations,” she wrote.
Jerome Powell Sold More Than a Million Dollars of Stock as the Market Was Tanking [The American Prospect]
Elizabeth Warren Doesn’t Get Fed Trading Ban Proposal by Oct. 15 as Requested [WSJ]
Senate GOP signals they'll help bail out Biden's Fed chair [The Hill]
Yellen Says Debt-Limit Deal Will Keep Government Funded Through Dec. 3 [WSJ]
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