The Fed’s Ethics Are Being Tested

The Federal Reserve compiles and publishes a great deal of information about the finances of American households and businesses. The quarterly Flow of Funds report and the triennial Survey of Consumer Finances are the leading expressions of this effort.

More recently, the finances of senior Fed officials have been getting a lot of attention. It recently came to light that several members of the Federal Open Market Committee were particularly active in the markets during the early part of last year, when the Fed was contemplating what to do about the pandemic. Somehow, the activity did not trigger an ethics objection; the reallocations proved fortuitous when markets rallied on the back of easier monetary policy.