- The new rules expanded the original October ban to include bitcoin and cryptocurrencies.
- Employees of the Federal Reserve will no longer be able to invest in a group of assets, including bitcoin.
The new rules, which go into effect on May 1, prohibit Fed officials from purchasing stocks, bonds, cryptocurrencies, or other securities.
The Fed said in a statement that the rules “aim to support public confidence in the impartiality and integrity of the Committee’s work.”
According to new rules shared by the Federal Open Market Committee (FOMC) in a Friday statement, Federal Reserve (Fed) officials will be prohibited from investing in a variety of assets, including bitcoin.
“The rules, which were first announced in October 2021, aim to support public confidence in the impartiality and integrity of the Committee’s work by preventing even the appearance of any conflict of interest,” according to the statement.
According to the statement, senior Fed officials will no longer be able to invest in stocks, sector funds, bonds, agency securities, cryptocurrencies, commodities, foreign currencies, derivatives contracts, or securities beginning May 1.
The new rules are an improvement over previous provisions that prohibited Fed officials from holding bank stocks and Treasury securities or engaging in financial transactions during a blackout period surrounding FOMC meetings.
Board members, regional bank presidents and first vice presidents, as well as a variety of other officials such as staff officers, bond desk managers and deputy managers, and directors who regularly attend FOMC meetings, will be subject to the new rules. The rules apply to their spouses and minor children as well.
“The Federal Reserve anticipates that additional staff will be subject to all or parts of these rules following the completion of additional review and analysis,” according to the statement.
The move follows last year’s revelations that several senior Fed officials were trading stocks and stock funds in tandem with the central bank’s actions that boosted the economy at the start of the pandemic in 2020. Regional presidents Erick Rosengren and Robert Kaplan resigned as a result of the controversy.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.