The Federal Reserve further revealed their corruption, as both Robert S. Kaplan [head of the Bank of Dallas] and Eric S. Rosengren, [head of the Federal Reserve Bank of Boston] plan to retire early, from head roles within the Federal Reserve. Their resignation coincidentally came after their trading activity during the pandemic came into question.
Separate filings show the two head bankers buying and trading millions of dollars of stocks during the pandemic, while also projecting public information to fuel their own personal endeavors. Regardless of what was best for the country, they chose to hold their own financial interests high above America’s economy.
Should those who control and regulate the flow of U.S. currency be allowed to individually profit off financial transactions directly related to their position?
The Blackout Improvement Act
Both head bankers at the Federal Reserve gave a statement that no trades were made during the Federal Reserve’s “blackout period”.
The Blackout Improvement Act states, “This bill amends the Federal Reserve Act to restrict the types of public communications that Federal Open Market Committee (FOMC) members and staff may make regarding financial developments or monetary policy during a “blackout period” (i.e., a period extending from approximately one week before an FOMC meeting to approximately one day afterwards).”
Despite not trading during the forbidden “blackout” period, is it possible someone in that position [of power] could have manipulated the market, in a direction that best suits their own interest?
The two Fed leaders had been actively buying and selling securities throughout the pandemic, while also serving on the same committee directing the central bank’s interventions in U.S. financial markets.
“Their exit will take out two of the nine more hawkish Fed officials who saw a 2022 rate hike as of the September F.O.M.C. meeting last week and remove important voices on financial stability issues in particular,” Krishna Guha at Evercore ISI stated.
Robert S. Kaplan –
Kaplan bought and sold millions of dollars in individual stocks, among other investments last year, first reported on by The Wall Street Journal.
Eric S. Rosengren –
Rosengren announced on Monday morning that he was retiring early due to a kidney condition. Could the filings and investigation of their trading activities have played a role in his early retirement?
The Boston Fed president came under criticism because he held stakes in real estate investment trusts, which invest in and manage properties, and listed purchases and sales in those in 2020. Rosengren alerted America of the risks in our commercial real estate market. To fix this, Rosengren created the policy for mortgage-backed security purchases, influencing the housing market.
Rosengren played a key role in the 2020 coronavirus response. His regional Fed ran both the money market mutual fund and Main Street lending backstop programs that the Fed rolled out last year.
Jerome Powell –
“No one on the F.O.M.C. is happy to be in this situation, to be having these questions raised,” Jerome Powell said, referring to the policy-setting Federal Open Market Committee.
He added, “This is an important moment for the Fed and I’m determined that we will rise to the moment.”
Elizabeth Warren –
Elizabeth Warren has spoken out against the overstep in power from the federal reserve.
Senator Warren stated, “This controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest,” said Senator Warren.
“Regional Fed leaders must ban the ownership and trading of individual stocks by senior officials, and impose strong and enforceable ethics and financial conflicts of interest rules for themselves and their staff to restore public trust. At a minimum, these rules should reflect the robust and comprehensive guidelines in my Anti-Corruption and Public Integrity Act. Instating critical ethics rules will send a clear and necessary message to the American people about the importance of government ethics and the integrity of Fed officials.”
Similar to the required nonpartisan stance of the Supreme Court Justices, should the Federal Reserve’s self interests be deferred during their role in the organization, for the greater good of American prosperity?