US Fed staff reported securities trades -WSJ

The headquarters of the Federal Reserve in Washington on September 16, 2015. REUTERS/Kevin Lamarque/

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Feb 11 (Reuters) – Two senior U.S. Federal Reserve officials reported a series of financial market transactions in early 2020 at a time when the central bank was putting in place emergency measures to support the economy at the start of the COVID-19 pandemic, The Wall Street Journal reported on Friday.

John Stevens and Diana Hancock, both currently Senior Associate Directors of the Fed’s Research and Statistics Division, reported in official financial disclosure forms on a series of transactions in February and March 2020.

Stevens reported 46 financial transactions on February 27 and 28, 2020, buying and selling individual company stocks, mutual funds and other investments.

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The securities were part of a 2019 inheritance that was wholly owned by Stevens’ wife, Dominique Casimir-Stevens, she told Reuters after the newspaper published its report.

“I had a financial adviser rebalance these investments for me to bring them into line with ethical rules. It was this rebalancing that led to the large number of transactions that my husband disclosed,” a- she declared.

“I am devastated that my father’s unexpected death and the steps we took to play by the rules are now being used to tarnish my husband’s reputation and public service.”

Hancock’s revelations included a sale of more than $1 million in an exchange-traded fund, which owns shares in certain companies, on February 27. Hancock told the newspaper that his wife made the transactions and she had no control over those transactions.

The declaration forms do not distinguish between the occupations of staff and those of their spouses.

Fed Chairman Jerome Powell on February 28, 2020 indicated that the central bank would cut interest rates if necessary, which it did in early March, the same month it launched a series of programs to maintain flexible financial conditions and stimulate lending.

The Fed has come under intense scrutiny after the disclosure of corporate actions by Fed chairs and governors during the pandemic. Unlike Fed staffers, Fed policymakers have access to the full range of policy-relevant deliberations and documents.

Powell has since announced new ethics rules governing holdings and financial transactions at the central bank and an investigation by the central bank’s inspector general is ongoing.

Questions remain about the extent of policymakers’ personal trading in a year when markets first crater and then rebound on the basis of both massive federal fiscal stimulus and an effort to aggressive bailout from the Fed.

Earlier this week, the Fed, responding to a Freedom of Information Act request from Reuters, said there were about 60 pages of correspondence between its ethics officers and policymakers regarding financial transactions made in 2020. , but “entirely refused” to release the documents, citing exemptions under the Information Act that she said applied in this case.

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Reporting by Vishal Vivek in Bengaluru, Lindsay Dunsmuir and Ann Saphir; Editing by Chizu Nomiyama and Andrea Ricci

Our standards: The Thomson Reuters Trust Principles.

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