Fed officials will be banned from owning individual stocks, Jerome Powell says in new guidelines

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Fed officials will be banned from owning individual stocks, Jerome Powell says in new guidelines
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Federal Reserve announces ban on officials owning individual stocks and limits on other activities.

The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff. Future investments will have to be confined to diversified assets such as mutual funds.

“These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Fed Chair Jerome Powell said in a statement. The rules come on the heels of disclosures that multiple Fed officials had been buying and selling stocks at a time when the central bank’s policies were designed to improve market functioning, particularly during the Covid crisis.

Vice Chairman Richard Clarida also had been featured in the reports. Powell also sold securities last year, though they were exchange-traded funds that tracked market indexes.

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