Powell Outlines Reasonable Ethics Rules

2nd Q on ethics: Do you think it's appropriate for Federal Reserve officials to be owning the same assets that the Fed is buying, is that one of the modifications you are looking at?

- A: We don't have a timeline yet. Let me address the muni question. I personally owned municipal securities for many years. In 2019 I froze it. I holding all the securities to maturity. Munis were thought to be a safe place for a Fed person to invest because you thought the Fed would never buy munis.

• Then comes the Covid crisis and I reversed that policy and I did it without hesitating because the financial market was on the verge of collapse. We also checked with the office of government ethics who looked at it, and said we didn't have a conflict.
• You are right, though, we are going to look at all those things. I don't want to get ahead of the process here and speculate about particular outcomes. I want to be able to look back on this years from now, and know that we rose to meet this challenge and protected the public's interest.

Q: You said that Fed officials should not own the same assets they are buying?

- A: I think that is a reasonable thing. For the most part we don't. It was a real coincidence I happened to preown these munis.

• I did it years ago, it was an unforeseen event. I couldn't sell them, I held them and checked with the ethics people and went ahead. As a general principle, yes, that makes a lot of sense.