Federal Reserve Chairman Jerome Powell sold up to $5 million worth of stock from his personal account last October, according to a new financial disclosure form, a sale that occurred shortly before the Dow Jones Industrial Averagetanked.
The disclosure form, first reported by The American Prospect, shows that Powell sold between $1 million and $5 million of Vanguard Total Stock Market Index Fund shares on Oct. 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 previously told The Wall Street Journal that Powell's financial transactions complied with U.S. central bank rules and had been approved by government ethics officers. The representative added that transactions without specific date information were reported under rules that allowed things like regular reinvestments to be lumped together.
The disclosure comes after recent revelations that two of Powell's colleagues – Robert Kaplan, president of the Federal Reserve Bank of Dallas, and Eric Rosengren, president of the Federal Reserve Bank of Boston – bought and sold stocks and real-estate tied assets last year as the central bank undertook aggressive policy action to shore up the economy.
Kaplan traded millions of dollars of stock in companies, including Apple, Amazon and Google, while Rosengren traded in stocks and real estate investment trusts, according to financial 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 officials from owning bank stocks, limit trading around monetary policy meetings and warn against any activity that could suggest a conflict of interest, are crucial to ensuring the public's trust in the U.S. central bank, Powell said.
"We need to make changes, and we're going to do that as a consequence of this," Powell told reporters in September following the Fed's two-day policy-setting meeting. "No one is happy about this."
Still, some critics want the Fed to take additional steps and make major updates to the stock-trading rules. In a September letter to all 12 regional Fed banks Sen. Elizabeth Warren, D-Mass., called for the complete ban on stock ownership by senior officials.
"The 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," she wrote.
Warren has also called on the Securities and Exchange Commission to investigate the Fed officials' trading.
The latest revelation comes as the White House weighs whether to tap Powell to lead the Fed for another four years – one of the most consequential economic decisions for President Biden – before his term officially ends in February 2022. Press secretary Jen Psaki has said Biden will make the decision with enough time to ensure the Senate can confirm the individual.