Politics Fed's internal watchdog to review trades by top officials
We don't need platinum to solve the debt ceiling crisis
The answer is much simpler: Treasury should read the debt ceiling statute. The debt ceiling was created during World War I, and then refined over the next 20 years to remove Congress from the politics of borrowing. By 1939, the statute left it up to the Treasury to decide when and how to borrow, so long as the amount of debt "outstanding" was below a maximum amount.
The Federal Reserve's internal watchdog will review financial trades conducted by high-ranking officials last year amid growing backlash to how top central bank policymakers managed their portfolios amid the pandemic.
The Office of Inspector General (OIG), the bank's independent ethics investigator, is set to review whether investment moves made by Fed officials were in line with internal ethics rules and federal law.
"As part of our comprehensive review, we began discussions last week with the Office of Inspector General for the Federal Reserve Board (OIG) to initiate an independent review of whether trading activity by certain senior officials was in compliance with both the relevant ethics rules and the law. We welcome this review and will accept and take appropriate actions based on its findings," a Fed spokesman said in a Monday statement.
Dallas Fed president to retire after scrutiny of pandemic stock trades
Robert Kaplan, president of the Federal Reserve Bank of Dallas, announced Monday he will step down from the bank amid scrutiny over millions of dollars of financial trades he made at the outset of the coronavirus pandemic.Kaplan said in a Monday statement that he will step down from the Dallas Fed on Oct. 8, six years and one month after he was appointed to lead one of the Fed system's 12 reserve banks. Kaplan and Boston Fed President Eric Rosengren, who also announced his retirement Monday, have been under growing pressure after financial disclosures obtained by the Wall Street Journal and Bloomberg revealed heavy trading in individual stocks and other investment products
The review was .
Federal departments and agencies have OIGs to serve as an independent internal check for fraud, abuse and unethical conduct. OIG investigations typically conclude with a series of recommended changes to internal policies that led to the conduct in question, and occasionally with referrals to federal law enforcement agencies.
The OIG review comes as the Fed faces growing backlash over trades made by three top officials as the bank was plotting and conducting an unprecedented attempt to stabilize financial markets amid the onset of the pandemic. Despite buckling earlier in the year, the stock market ended 2020 considerably higher than its pre-pandemic peak thanks in part to the Fed's robust support for the economy and financial sector.
Elizabeth Warren will oppose Fed Chair Powell's renomination, calls him 'dangerous man' to lead Fed
Democratic Senator Elizabeth Warren announced Tuesday that she will oppose Federal Reserve Chairman Jerome Powell's renomination, making her the highest profile lawmaker to do so. © Provided by CNN "Your record gives me grave concern. Over and over you have acted to make our banking system less safe. And that makes you a dangerous man to head up the Fed," Warren told Powell during a Senate Banking Committee hearing. Warren argued the Powell-led Fed took "plenty of actions to weaken" oversight of banks, including by adjusting bank stress tests, the Volcker Rule and liquidity requirements.
The Wall Street Journal reported last month that Robert Kaplan, president of the Federal Reserve Bank of Dallas, made worth of stock trades in 2020. Subsequent reporting revealed that former Boston Fed President Eric Rosengren in products tied to corporate real estate, a sector he repeatedly expressed concerns about in public remarks throughout 2020.
Both Rosengren and Kaplan announced their retirements soon after, with the former leaving office last week and the latter set to leave Oct. 8.
Bloomberg News also reported Saturday that Fed Vice Chair Richard Clarida traded between $1 million and $5 million out of a bond fund into a stock fund Feb. 26 of last year. Fed Chair Jerome Powell announced the next day that the bank could take action to support the economy if the emerging pandemic continued to weigh on the economy.
Fed officials said all of the trades conducted by top policymakers complied with internal rules and were cleared by ethics officials. But the portfolio management has raised serious questions and bipartisan concern about the strength of rules meant to keep top economic policymakers from enriching themselves with advance knowledge of their actions.
On The Money — Presented by NRHC — Biden plays debt limit hardball with McConnell
Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.Today's Big Deal: President Biden is setting Republicans up to take the blame if the U.S. defaults, and won't guarantee it won't happen. We'll also look at the president's road trip to sell his economic agenda and new scrutiny of the Federal Reserve.But first, read more about the man who inadvertently "married" a bird.For The Hill, We're Sylvan Lane and Aris Folley Write me at firstname.lastname@example.org or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@thehill.
"Even if it appears to be the case that these trades were in compliance with existing rules, that just tells you the problem is the rules and the practices and the disclosure needs to be improved," Powell said at a
Fed experts say the scandal could damage the bank's credibility at a critical time for both the economy and the new approach to inflation cemented by Powell last summer. But Powell himself is facing growing danger as President Biden weighs whether to renominate the broadly popular Republican for another term leading the Fed.
Powell is largely aligned with Biden and Democrats on the need to keep up support for the economy through low interest rates until the job market is close to its full potential. Even so, a coalition of progressive Democrats and liberal activists are pressuring Biden to replace Powell over the Fed chief's support for loosening some financial rules.
Progressive critics of Powell's renomination have now seized on the trading scandal as a potential lapse of judgement and oversight.
Sen. Elizabeth Warren (D-Mass.), who called Powell too "dangerous" to reappoint last week, asked the Securities and Exchange Commission on Monday to investigate whether Clarida, Rosengren and Kaplan
While Warren didn't accuse Powell of any impropriety, she suggested in her letter that the Fed chief should have stopped the questionable trades of his colleagues.
"It is not clear why Chair Powell did not stop these activities, which corrode the trust and effectiveness of the Fed," she wrote.
NSA watchdog investigating targeting accusations from unidentified media member following Tucker Carlson's claims .
A watchdog for the National Security Agency on Tuesday said it is commencing an investigation into claims that the NSA targeted a member of the press following accusations from Fox News host Tucker Carlson that it spied on his show's private correspondence.The National Security Agency Office of the Inspector General announced Tuesday it is conducting a review of "recent allegations that the NSA improperly targeted the communications of a member of the U.S. news media," though the office did not name a particular member of the press.