Federal Reserve

Congressional selfies and self-congratulations inaugurated the week, but a lot of hard work remains to translate the Infrastructure Investment and Jobs Act’s (IIJA) policies into real-life results. Given that those policies are (generously) middling and that the most promising ones are underfunded, turning these into winning programs will demand energy, creativity, competence, and a strong commitment to the public interest.

Powell did not meet with any non-governmental individuals who are not members of or aligned with the financial industry. This stands in stark contrast to Powell’s predecessor, Janet Yellen, who is now the Secretary of the Treasury.

There is no assurance whatsoever that Quarles’ successor will have anything close to Quarles’ own power, should Biden refuse to nominate a new Federal Reserve Chair.

President Biden is nearing a decision on a Federal Reserve Chair nomination, but the Revolving Door Project’s work will not end with the conclusion of the reappointment fight.

It is very possible that President Biden will show up empty-handed to COP26 in Glasgow next week. And that isn’t just because of the apocalyptic vanity of two Senators from Arizona and West Virginia. Many executive-led policies that are just a matter of political will have not been done, and some of those which have are pure paper tigers. Biden’s administration failed last week to take advantage of a lesser known, but extremely meaningful climate action opportunity. The Financial Stability Oversight Council (FSOC) released its long-awaited report on climate-related financial risk, which the President personally ordered months ago. And it was a complete flop. 

We hope that these one-pagers help political professionals, the press, and onlookers to better understand the facts surrounding the reappointment debate.

It’s highly probable that Powell guessed in advance that October would be a rough month for stocks, and made a multi-million dollar choice to get out.

The cloistered, out-of-touch nature of Fed leadership derives mostly from its obscure senior staff members. And if one asks who sets the direction for them, one finds a fascinatingly top-heavy organizational structure.

The deeper problem with this argument gets at one of the most fascinating, least discussed dynamics of the Fed: the fact that it is an extraordinarily top-heavy institution, perhaps more than any part of the federal executive branch. 

“The malfeasance already in the public record is staggering. For the sake of government integrity, the public must learn how deep the rot goes at Powell’s Federal Reserve.”

The Revolving Door Project makes a point of watching independent agencies, those oft-overlooked entities, closely. As a result, we’ve had reason to give a great deal of thought to the purpose and meaning of “independence” in the agency context. As “independence” is invoked as a shield in other settings, that thinking may prove instructive. 

“Drastic action is necessary, because the prevailing assumption that what is going on at the Fed is a string of harmless, sloppy errors strikes us as wildly unsupported by the facts.”

Powell neglected to mention that he’d personally purchased shares that year in several actively-managed municipal bond funds, as a Revolving Door Project review of the Fed Chair and Vice Chairs’ 2020 financial disclosure forms shows.

The fact that the Fed’s current leadership team made or benefitted from multimillion dollar transactions contextualizes what we’ve seen at the Boston and Dallas regional banks: Chair Powell has facilitated a broad culture of lax ethical practices at the highest levels of the nation’s central bank.

Kaplan and Rosengren’s scandals aren’t the only ethics questions surrounding the Fed leadership’s conduct which merit greater scrutiny.