Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
FOMC formally adopts comprehensive new rules for investment and trading activity
Looks to be some pretty solid (ie, "good") measures, at least on first glance. Now if similar restrictions were in place elsewhere around government to help improve federal ethics practices.
That said, I agree that the restrictions look quite solid. Can't find any enforcement provision though. It could be implicit in the FOMC's ability to enforce its rules (self enforcement?).
One not too surprising curiosity is that they cannot hold a fund concentrated on T bonds and notes. Nor can they hold single state muni bond funds (which are characterized as sector funds), though they can hold national muni bond funds.
Fed's primary business is T-Bills, T-Notes, T-Bonds, TIPS, so that restriction makes sense. One can potentially execute yield-curve positioning plays with Treasury-only funds. In 2020, only IL tapped Fed's muni liquidity facility, but other states could (problem was that the Fed set muni rates too high). The Fed never dealt with munis before, and Powell and others held munis. Anyway, state muni restrictions also make sense just in case the muni liquidity facility is activated.
Comments
57 members of Congress have violated a law designed to stop insider trading and prevent conflicts-of-interest
That said, I agree that the restrictions look quite solid. Can't find any enforcement provision though. It could be implicit in the FOMC's ability to enforce its rules (self enforcement?).
One not too surprising curiosity is that they cannot hold a fund concentrated on T bonds and notes. Nor can they hold single state muni bond funds (which are characterized as sector funds), though they can hold national muni bond funds.
In 2020, only IL tapped Fed's muni liquidity facility, but other states could (problem was that the Fed set muni rates too high). The Fed never dealt with munis before, and Powell and others held munis. Anyway, state muni restrictions also make sense just in case the muni liquidity facility is activated.