Fed chairman Powell sold $5 million worth of stock in October

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Fed chairman Powell sold $5 million worth of stock in October

Chairman sold over $5 million worth of stock from his personal accounts in October last year, according to a new financial disclosure form, a sale that occurred shortly before the Dow Jones Industrial Average cratered.

The disclosure form, first reported by The American Prospect, shows that Powell sold between $1.5 million and $5.5 million of Vanguard Total Stock Market Index Fund shares on October 1, 2020. The Dow Jones Industrial Average tumbled nearly 6% over the course of October 2020, marking the steepest monthly drop since the early days of the pandemic when the virus brought the U.S. economy to a screeching halt.

There were also transactions listed without specific dates.

The Fed did not immediately respond to a FOX Business request for comment, but a spokesperson told The Wall Street Journal that Powell's financial transactions had been approved by the U.S. central bank and had complied with federal ethics procedures. The representative added that transactions were reported with long names under rules that allowed things like regular reinvestments to be lumped together.

The disclosure comes after recent revelations that two of Powell's colleagues Eric Rosengren, president of the Federal Reserve Bank of Dallas, and Robert Kaplan, president of the Federal Reserve Bank of Boston, bought and sold assets and real-estate tied assets last year as the central bank undertook aggressive policy action to shore up the economy.

Rosengren traded millions of dollars of stock in companies, including Apple, Amazon and Google, while Kaplan traded shares and real estate investment trusts according to legal disclosure forms. Both men resigned following the controversy, though Rosengren cited health reasons for his early departure In the wake of the trading scandal Powell acknowledged the U.S. Central Bank's current rules dictating what its officials are allowed to invest in and trade are not adequate and need to be updated. The rules, which ban senior managers from holding stocks, restrict trading around monetary policy meetings and warn against any activity that could suggest a conflict of interest, are critical to ensuring the public's trust in the U.S. Central Bank, Powell said.

You need to make changes, and we're going to do that as a result of this, Powell told reporters in September after the Fed's policy meeting. No one is satisfied about this. Still, critics want the Fed to make major changes to the stock-trading rules and take additional steps. In a September letter to all 12 regional Fed banks Sen. Elizabeth Warren, D-Mass., has denied the claim of Congress’ location. Pankaj : Many senior officials called for the complete banning of shares ownership.

The controversy over asset trading by senior Fed personnel highlights why it is necessary to fire a public official who is supposed to serve the individual interests (i.e. ownership and trading of individual shares), she wrote.

In addition, Warren called for the Securities and Exchange Commission to investigate the Fed's trading.

The latest revelation comes as the Fed considers whether to tap Powell to lead the Fed for another four years one of the most consequential economic decisions for before his term officially ends in February 2022. Press secretary Biden has said Biden will make the decision with enough time to ensure the Senate can confirm the individual.