The Federal Reserve’s ethics office warned officials against making unnecessary trades in March 2020, when the central bank was beginning to take measures to support the financial market as the pandemic was starting to take hold in the U.S.
The New York Times reported on Thursday that the Fed’s Board of Governors’ ethics unit sent an email March 23 urging officials who can access sensitive materials not to make unnecessary trades.
The message, which was confirmed to the Times by someone who viewed the email, was also reportedly sent to regional bank presidents by their specific ethics officers.
The email came as the central bank was introducing new initiatives to mitigate economic downfall in the early days of the pandemic, including purchasing corporate bonds and buying government-backed debt, the Times noted.
Financial disclosure forms signal that the officials listened to the recommendations, according to the newspaper. A majority of regional presidents and governors of the Fed did not actively trade in April.
The Hill has reached out to the Fed for comment.
News of the March 2020 email comes amid increased scrutiny on the Fed after top officials made investment decisions last year as the central bank was allocating trillions of dollars in emergency relief efforts to help the economy amid the pandemic.
The scandal, which emerged over the summer, resulted in former Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren announcing their retirements.
The newly revealed emails, however, may create additional issues for the Fed because it illustrates that ethics officials and other personnel knew that active trading in the beginning days of the pandemic could reflect poorly on the central bank, the Times noted.
Sen. Elizabeth Warren (D-Mass.) is now calling on Fed Chairman Jerome Powell to release the ethics warning.
“I am writing to ask that you release this information immediately, so that Congress and the public can evaluate the extent to which Fed officials may have known of the risks from their trading, and if they ignored calls by ethics officials to avoid this scandalous behavior,” Warren wrote in a letter to Powell.
The new emails also come as Powell’s future remains unknown. The Fed chairman’s term expires in February, and President Biden, though expressing confidence in Powell, has not yet said if he will reappoint him for another term.
Warren, on the other hand, has emerged as one of Powell’s strongest critics, contending that he has “failed as a leader” and urging Biden to replace him.