Press conference exchange between MICHAEL DERBY and Fed Chair Jerome Powell:

user: Thank you for taking my question. You noted earlier in the press conference that you weren’t aware of the trading activity of the Boston and Dallas Fed Bank presidents. As you know, those, all 12 regional Fed Bank presidents just went through the renomination process earlier this year. And Governor Brainard described it as a rigorous process at the time. So I want to know, did anybody know—did anybody at the Board level know about the stock trading activity? And, going forward, do you still have confidence in the Dallas and Boston Fed Bank presidents to do their job?

assistant: So these, I don’t need to tell you, we file, people file these reports annually. And I think they were just quite recently filed for 2020. So I don’t have any reason to think people at the Board would have known about particular trading that’s going on. They will see that—there are people at the Fed who see the, you know, see the trading reports when they’re, you know, when they’re annually filed. You know, in terms of having confidence and that thing, I think no one is happy, no one on the FOMC is happy to be in this situation, to be having these questions raised. It’s something we take very, very seriously. This is an important moment for the Fed, and I’m determined that we will rise to the moment and handle it in ways that will stand up over time. I’m very reluctant to get ahead of the process and speculate, though, about different things. And, you know, when we have things to announce, we’ll go ahead and do that, but that’s really what I have for today.

user: One small follow-up. I mean, I know that you didn’t have the 2020 forms in hand, but you would have had past-year forms in hand. And at least in the case of, like, the Dallas disclosure forms, similar trading activity was shown in years past. So that, in theory, could have been something that came up in the renomination process.

assistant: So that’s, yeah, that’s a good question. So, you know, the five-year review that we do under this unusual provision of law where all of the Reserve Bank presidents are reviewed for reappointment at the same time every five years, that is really a broad review about their leadership of the institution, their performance on the FOMC, all of those things. And if there were a concern—a public concern or a private concern—about something that someone had done, we wouldn’t wait for the five-year. We wouldn’t wait that day if there were concerns. You’re right, though, these—as I mentioned, we have had a framework for a long time, and it’s similar to what other government agencies have, only it’s a little stricter. And it is that you can trade financial instruments, but not specific ones like bank debt. You can’t trade during the FOMC period and during the meeting—the blackout period and then during the meeting. And then you disclose all this, and we have disclosed it for years. So all of these things have been going—to the extent they’ve been going on, they’ve been a matter of public record. And, you know—but, nonetheless—so that—you know, it was seeming to work just okay. And now you look at it, and you see this, and you think, “We need to do better.” And we will. But you’re right, but it has not been part of the process. And, appropriately, I don’t think it should have been. I mean, I wouldn’t blame the people who conduct that review. I really think, if someone had raised concerns or if we’d had concerns, then it would have been, but it wouldn’t have been part of that process. It would have been raised instantly, rather than once every five years.