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What a great game Central Bankers play. Federal Reserve Presidents Kaplan and Rosengren said they will sell individual stock holdings after the press questioned their ethics. This comes at a time of taper concerns and market top calls.

Wonderful Life Cigar

Dallas Federal Reserve presidents Robert Kaplan and Boston Fed President Eric Rosengren said Thursday they will sell their individual stock holdings. This comes under the guise of ethics concerns regarding their trading in 2020. Both Fed officials faced scrutiny surrounding their stock purchases in a year where their central bank actions propped up financial markets during the Covid pandemic with massive QE stimulus.

The two Fed officials said will sell all their stocks by Sept. 30 and put the proceeds in passive investments, they said in statements released Thursday. Many theories abound given the timing of all this becoming public and the bankers response. The move is perfectly timed at or near record highs and at a time where Fed Governors have been meeting to decide on tapering of QE.

Influential market players have also been talking the market down. Morgan Stanley said they were looking for a 25% pullback for example. The timing seems very suspect.

Some would argue it is under the covor of darkness.

“While my personal saving and investment transactions have complied with the Federal Reserve’s ethics rules, I have decided to address even the appearance of any conflict of interest by taking the following steps,” Rosengren, president of the Boston Fed, said.

Fed Rosengren Caught

A Bemused Rosengren

The whole situation became public when reported by The Wall Street Journal the financial disclosure form from Dallas Fed President Kaplan revealed a number of trades in individual stocks last year including Apple, Amazon and Delta Airlines. Kaplan owned a total of 32 individual stock, fund or alternative asset holdings, with 27 of those valued at more than $1 million at the end of 2020, according to the disclosure.

Fed Kaplan Sprung

Kaplan gets a chance to sell at the top without questions?

Rosengren and Kaplan serve as presidents of two of the Fed’s 12 regional banks that span the UNited States. The regional bank presidents take turns serving on the Federal Open Market Committee that sets rates policy.

SourceL WSJ, Reuters

From The TradersCommunity News Desk

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