Article by Wu Yu, Jinshi Data
The latest publicly released meeting minutes from the Federal Reserve show that two Fed governors met with or participated in events involving banking industry representatives during the “quiet period” surrounding FOMC meetings in May and June this year. Although there is currently no evidence that they violated the Fed’s communication guidelines, such contacts at these times are uncommon.
Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, had a meeting scheduled with the head of the Massachusetts Bankers Association in the week leading up to the FOMC meeting on June 16–17. A Federal Reserve spokesperson stated that the meeting was in preparation for her upcoming public speech at the association’s event, held the week following the FOMC meeting.
Former Federal Reserve Chair Jerome Powell attended a reception hosted by the Global Board of Directors of BNY Mellon on June 9, also one week before the FOMC meeting. A Federal Reserve spokesperson stated that Powell participated as a guest speaker and did not speak at the event.
These meeting minutes were released by the Federal Reserve late Friday night, following a request submitted by Bloomberg in July.
According to regulations, Federal Reserve officials are prohibited from publicly discussing their views on the economy or monetary policy approximately one and a half weeks before an FOMC meeting and until the day after the meeting concludes. Even outside the quiet period, officials must not disclose related views in non-public settings unless they are merely repeating content previously made public.
Amid the exposure of the above schedule, Trump's pressure on the Federal Reserve has also intensified again.
After Kevin Warsh replaced Powell as Fed chair this year, Trump temporarily reduced his public pressure on the Federal Reserve. But his latest actions indicate that pressure is resurfacing. Meanwhile, Trump’s approval ratings have clearly declined ahead of the November midterm elections, with polls showing voter dissatisfaction over his handling of the cost of living and the Iran conflict.
In August, U.S. non-farm payrolls unexpectedly rose by 162,000 jobs, while the unemployment rate remained stable. Investors subsequently increased bets on a rate hike at the next Federal Reserve meeting, causing U.S. stocks and short-term Treasury yields to decline.
Trump then expressed dissatisfaction with the market decline. He stated that job data was strong, credit and economic conditions were solid, and the stock market "should be rising," but was falling due to concerns about inflation.
Trump's statement was even more aggressive than that of White House Chief Economic Advisor Kevin Hassett, who said on the same day that strong employment data strengthened the case for maintaining current interest rates, adding, "We respect the Fed's independence, but I believe the case for holding rates steady is quite strong."
Bauman's previous private dinner also sparked calls for an investigation.
Bauman previously drew attention for attending a private dinner during the quiet period.
Prior reports from Bloomberg and other media outlets stated that Bowman attended a private dinner hosted by Bank of America in New York several hours after the conclusion of the June FOMC meeting. Bowman later said she did not discuss monetary policy positions at the dinner and affirmed that she has "always complied with all applicable FOMC rules and ethical guidelines," and will continue to do so.
The dinner subsequently prompted U.S. Senator Elizabeth Warren to call for an investigation by the Federal Reserve's Office of the Inspector General.
Bowman’s schedule for June 17 also shows that she met with Senator Bill Hagerty of Tennessee, a Republican, about an hour after the FOMC meeting concluded, before the interest rate decision had been publicly announced. Federal Reserve officials may communicate with government officials during the quiet period, including discussions of non-public information, but they may not disclose confidential FOMC information without the Chair’s written authorization.
It is not inherently improper for Federal Reserve officials to communicate with external parties around the time of FOMC decisions, but such interactions with banking professionals or the public during this window are uncommon.
Bauman’s schedule also shows that she attended a roundtable hosted by the Colorado Forum on May 7 and another roundtable event organized by the Bankers Associations of New Hampshire and Vermont on May 14. A Federal Reserve spokesperson stated that both events were feedback sessions on regulatory matters and did not involve discussions on monetary policy.