WASHINGTON — Federal Reserve Vice Chair for Supervision Michelle Bowman attended a private dinner hosted by Bank of America for clients in New York on the evening of June 17, just hours after the central bank announced its latest interest-rate decision, according to several reports.
The gathering took place during the Federal Reserve’s communications blackout period, which restricts Fed officials from publicly discussing economic developments or monetary policy around meetings of the Federal Open Market Committee, the Wall Street Journal reported. The blackout period extends through the day after a policy meeting concludes.
In a statement provided to The Wall Street Journal, Bowman said she did not discuss monetary policy during the event.
“I have consistently complied with all applicable FOMC and ethics rules and remain firmly committed to doing so,” Bowman said.
What Rules Call For
According to The Wall Street Journal, Federal Reserve rules do not explicitly prohibit private meetings but instruct officials to avoid sharing personal policy views with individuals who could benefit financially from the information unless those views have already been made public. The rules also caution officials against providing any organization with what the Fed describes as a “prestige advantage” over competitors.
The Fed’s communications policy states that policymakers should carefully consider meetings with individuals who could financially benefit from exclusive access to Federal Reserve officials and should exercise caution when accepting invitations to events sponsored by for-profit organizations or closed to the public and media, the Journal stated.
Violation is Unclear
The Journal reported that it remains unclear whether Bowman’s attendance violated those guidelines. The policy, adopted by the FOMC in 2011 and reaffirmed annually, does not specify enforcement mechanisms.
According to people familiar with the matter cited by The Wall Street Journal, at least two invited clients declined to attend the dinner, concluding that participation could create compliance concerns for their own organizations because of the Fed’s blackout-period restrictions.
The dinner was organized by Hayley Boesky, Bank of America’s executive vice chair for public policy and client engagement and a former employee of the Federal Reserve Bank of New York, according to the report. Boesky did not respond to the newspaper’s request for comment.
More than 20 investors and business leaders attended the event, which was not publicly advertised, The Journal reported. According to one person familiar with the gathering, Boesky reminded attendees that blackout-period rules prevented Bowman from discussing monetary policy. When one attendee asked about the interest-rate projections Bowman submitted for the June policy meeting, she declined to answer, citing the blackout restrictions, and instead referred attendees to a speech she delivered in late May outlining her views.
Report ‘Unfairly Characterizes Event’
Without identifying specific inaccuracies, Bowman told The Journal that its reporting was inaccurate and “unfairly characterizes” the event.
Ethics experts and former Federal Reserve officials questioned the appropriateness of the gathering.
Richard Painter, who served as chief White House ethics lawyer under President George W. Bush, told The Journal that a bank offering clients private access to a senior regulator raises concerns about exclusive access.
“It’s like the referee is in the game wearing the team jersey,” Painter said.
Patrick Harker, who retired last year after leading the Federal Reserve Bank of Philadelphia for a decade, told the newspaper that ethics officials at his regional bank would not have approved participation in a similar event.
“No closed-door meetings, for sure. No way,” Harker said. “If Bank of America is putting their dinner on, it’s giving them a commercial advantage, right? So, we were not allowed to do those.”
Regulation Reportedly Discussed
According to people familiar with the dinner cited by The Journal, Bowman largely discussed banking regulation rather than monetary policy and was accompanied by two Federal Reserve staff members.
One attendee told the newspaper that Bowman agreed when a participant described Federal Reserve Chairman Kevin Warsh’s first post-meeting news conference as refreshing. She also reportedly suggested that the task forces Warsh announced earlier in the day would draw heavily on outside experts.
The Journal further reported that Bowman expressed skepticism regarding the Fed’s standing repo facility, a lending mechanism designed to help the central bank maintain control over short-term interest rates by allowing banks to borrow overnight cash against Treasury securities.
Bowman, who joined the Federal Reserve Board in 2018 after being nominated by President Donald Trump during his first term and was elevated to the Fed’s top banking-regulation position last year, has advocated easing portions of the regulatory framework established after the 2008 financial crisis.
