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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,761
824hr
Pakistan Cases
1,286,453
43124hr
0.98% positivity
Sindh
476,494
Punjab
443,379
Balochistan
33,491
Islamabad
107,848
KPK
180,254

WASHINGTON: Two Federal Reserve officials who came under scrutiny for investment trades they made last year announced their retirements on Monday, in a controversy that has already sparked a planned review of the Fed’s ethics rules.

Dallas Fed President Robert Kaplan said he will retire on Oct. 8, citing the “distraction” of the controversy over his investments, while Boston Fed President Eric Rosengren said he will retire on Sept. 30, pointing to a long-term health condition. The two are among 12 regional Fed presidents that get rotating seats on the central bank’s powerful monetary policy committee, which sets US interest rates.

Kaplan and Rosengren had faced calls to step down for investment trades made in 2020, a year in which the Fed took unprecedented action to steady the economy, while news of the transactions, revealed in recent financial disclosures, raised questions about the effectiveness of Fed trading guidelines for policymakers.

Their departure came after Fed Chair Jerome Powell, who is nearing the end of his term and under consideration for reappointment as Fed chief, called earlier this month for a review of the central bank’s ethics rules and said the policies need to change.

Powell is due to testify before the Senate Banking committee on Tuesday, where he may face questions from Democratic Senator Elizabeth Warren, who has demanded stricter ethics rules at the regional Fed banks.

According to financial disclosures first reported by the Wall Street Journal Kaplan made multiple million dollar trades in individual stocks in 2020. Rosengren invested in real estate investment trusts on a smaller scale, but he was criticized for making the moves while also calling out risks in the real estate sector.

The financial disclosures did not look strikingly different from prior years, and both officials said their investment trades were cleared by ethics officers and did not violate Fed policy. They also previously agreed to sell their stock holdings by the end of September to avoid even the appearance of a conflict of interest.

But the actions were still viewed as problematic during a year when millions of Americans lost their jobs and the Fed took sweeping action to stabilize financial markets and the economy in the wake of the rapidly-unfolding pandemic.

When asked if he trusted the two regional Fed bank presidents to do their jobs, Powell said last week that “in terms of having confidence and that sort of thing, I think, no one is happy.”

Calls for broader reform of Fed ethics rules continued Monday despite the resignations, with outside groups pressing Powell to take stronger action.

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