October 21 (Reuters) – Federal Reserve Chairman Jerome Powell may have to sell up to $ 3 million in bonds to comply with new rules issued by the U.S. central bank on Thursday, a review of its financial information found .
Powell appears to be the only Fed governor whose holdings are divested under the new policy, released after a week-long review following revelations that some Fed policymakers have been divested. were engaged in active securities trading last year even as the central bank took aggressive financial action. markets.
In his government ethics brief for 2020, Powell said total financial assets valued at $ 98 million.
Among these were $ 1.25-3 million in municipal bonds held by his family trusts.
Rules released Thursday prohibit Fed policymakers from holding such securities. Holders will be required to divest themselves, a Fed official said.
No other Fed governor has reported holdings that appear to be subject to mandatory divestment.
Asked about his holdings at a press conference last month, Powell said munis had always been “considered a safe enough place for a Fed person to invest because, as you know, the tradition was that the Fed would never buy municipal securities. “
But after the pandemic hit, the Fed began buying large swathes of financial markets to avoid seizing up, including municipal and corporate bonds.
It is not known how long it will take before the new rules take effect.
(This story corrects Powell’s total reported assets to $ 98 million.)
Reporting by Ann Saphir and Lindsay Dunsmuir; Editing by Alistair Bell
Our Standards: Thomson Reuters Trust Principles.