Author: Wu Yu, Jinshi Data
The latest public schedules released by the Federal Reserve show that two Fed governors met with banking industry representatives or attended related events in May and June this year during the "quiet period" around Federal Open Market Committee (FOMC) meetings. While there is currently no evidence that they violated Fed communication rules, these contacts are unusual in their timing.
The schedule of Fed Vice Chair for Supervision Michelle Bowman shows that she met with the head of the Massachusetts Bankers Association in the week leading up to the June 16-17 FOMC meeting. A Fed spokesperson stated that this meeting was in preparation for her public speech at an event hosted by the association the week after the FOMC meeting.
Former Fed Chair Jerome Powell attended a reception hosted by Bank of New York Mellon's global board on June 9, also the week before the FOMC meeting. A Fed spokesperson said Powell attended as an invited guest and did not speak at the event.
These schedule records were released by the central bank late last Friday, following a Freedom of Information Act request by Bloomberg in July.
According to regulations, Fed officials are prohibited from publicly discussing their views on the economy or monetary policy for about a week and a half before an FOMC meeting and the day after the meeting ends. Even outside the quiet period, officials are not allowed to disclose related views in non-public settings unless merely reiterating previously published content.
The exposure of these schedules coincides with renewed pressure on the Fed from Trump.
After Kevin Warsh succeeded Powell as Fed Chair this year, Trump initially reduced public pressure on the central bank. But his recent moves indicate pressure is re-emerging. Meanwhile, Trump's approval ratings have notably declined ahead of the November midterm elections, with polls showing voter dissatisfaction with his handling of the cost of living and the Iran war.
U.S. non-farm payrolls unexpectedly increased by 162,000 in August, with the unemployment rate holding steady. Investors subsequently raised their bets on a rate hike at the Fed's next meeting, leading to declines in U.S. stocks and short-term Treasury prices.
Trump later expressed displeasure over the market drop. He stated that with strong jobs data, good credit, and economic conditions, the stock market "should be rising," but it fell due to inflation concerns.
Trump's remarks were even more aggressive than those of White House chief economic adviser Kevin Hassett. Hassett said that day that the strong jobs data strengthened the case for keeping rates at current levels, adding, "We respect the Fed's independence, but I think the case for leaving rates unchanged will be quite strong."
Bowman's Prior Private Dinner Also Sparked Calls for Investigation
Bowman had already drawn attention for attending a private dinner during a quiet period.
Bloomberg and other media previously reported that Bowman attended a private dinner hosted by Bank of America in New York a few hours after the conclusion of the June FOMC meeting. Bowman later stated that she did not discuss monetary policy stances at the dinner and said she has "always complied with all applicable FOMC rules and ethics guidelines" and will continue to do so.
This dinner subsequently prompted U.S. Senator Elizabeth Warren to call for an investigation by the Fed's Office of Inspector General.
Bowman's schedule for June 17 also shows she met with Tennessee Republican Senator Bill Hagerty about an hour after the FOMC meeting ended that day, before the interest rate decision was publicly announced. Fed officials are permitted to communicate with government officials during quiet periods, including discussing non-public information, but cannot disclose confidential FOMC information without written authorization from the Chair.
Contact between Fed officials and external parties around the announcement of an FOMC decision is not a violation in itself, but interacting with banking industry representatives or the public within this timeframe is not common.
Bowman's schedule also shows she attended a roundtable hosted by the Colorado Forum on May 7 and participated in a roundtable event held by the New Hampshire and Vermont Bankers Association on May 14. A Fed spokesperson said both events were part of regulatory listening activities and did not involve discussions on monetary policy.
