Federal Reserve Update
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Two Fed officials said that one year after the Fed took extraordinary measures to support the financial markets, they will sell their stock portfolios before the end of the month after accepting investment and transaction reviews.
The presidents of the Federal Reserve Bank of Dallas and the Federal Reserve Bank of Boston, Robert Kaplan and Eric Rosengren, respectively stated that they will hold the proceeds from the sale of shares in cash or invest them in Diversified index funds, which will prevent them from picking individual stocks.
The two said that they would avoid any stock trading as long as they continue to be at the helm of the organization.
Kaplan said on Thursday that financial transactions conducted during his tenure as the chairman of the Dallas Fed complied with the central bank’s ethical rules, but he “decided to change [his] Investment practices” to “even avoid any conflict of interest.”
Rosengren issued a similar statement at the same time and expressed regret for any ethical issues.
“It’s a pity that the emergence of… The permitted personal investment decision has created some problems, so I decided to divest these assets to emphasize my Federal Reserve Code of ethics,” he said. “For me, even if there is a conflict of interest, it is very important to avoid this situation. “
Kaplan revealed this month that he holds shares in 27 listed companies, funds and alternative investments valued at more than $1 million. The Wall Street Journal subsequently reported the news this week.
His holdings include iPhone maker Apple, Chinese e-commerce group Alibaba, electric car maker Tesla, and telecom group Verizon.
His disclosure also indicated that he owns shares in the Kansas City Royals baseball team, indicating that he had conducted various transactions worth more than $1 million in 22 stocks and funds last year.
The disclosure is not detailed enough to show how Kaplan’s portfolio has performed in a year when the market rose 16%, even though he holds shares in several high-priced companies, the most famous of which is Tesla.
But Kaplan also holds the worst blue chip stocks this year, including Delta Air Lines and Boeing, as well as some oil and gas companies that have been hit by falling crude oil prices—including Valero, Chevron and Marathon Oil.
Rosengren, who warned of risks in the real estate market, listed shares worth at least $151,000 in four real estate investment trusts.
The disclosure revealed that he held positions in Annaly Capital, Invesco Mortgage Capital, Two Harbours Investment and AGNC Investment Corporation at the end of last year, and he bought and sold shares throughout the year.
According to reports, his positions in Annaly, AGNC and Two Harbors represent three of the four largest publicly traded stocks in his portfolio.
He also owns shares in companies such as AT&T, Pfizer and Chevron.