U.S. Federal Reserve Chair Jerome Powell said on Wednesday he was displeased with the active investing carried out by two Fed regional bank presidents and pledged the central bank's ethics rules will be tightened after a thorough review.
"We need to make changes and we are going to do that," Powell said at a televised press conference after the Fed's latest policy meeting.
Asked if he still trusted Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren to do their jobs, Powell said, "In terms of having confidence and that sort of thing, I think, no one is happy. No one on the is happy to have these questions raised." Both Kaplan and Rosengren have said their ethics officers had signed off on their trading, but have since pledged to divest their holdings by the end of this month to avoid the appearance of a conflict of interest.Powell said he had not been aware of their trading activities before they were reported earlier this month by the Wall Street Journal and others.
"Munis were always thought to be a pretty safe place for a Fed person to invest because as you know the lore was that the Fed would never buy municipal securities," he said.
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